Negotiating a contract and finalizing a BI software vendor depends on how well you match suppliers to your requirements using a request for proposal (RFP).
How is a business intelligence RFP different from an RFI and RFQ? Do you need all three, and in what order? This article discusses these documents and how an RFP supports preliminary vendor outreach.
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Article Roadmap
What Is an RFP?
A request for proposal is a formal, structured document to solicit proposals or bids from vendors, suppliers and service providers. A BI request for proposal invites submissions from BI software and service vendors.
It’s an early step in procurement, and you should have a BI requirements checklist ready by this time. However, requirements aren’t the only item in this document.
- It offers information about the company that might interest vendors when submitting a proposal.
- Additionally, it includes project details, proposal submission guidelines, selection timelines, evaluation criteria and contract terms.
- Fine-tune the requirements using inputs from data teams and people who’ll use the BI system.
- Clear evaluation criteria encourage healthy vendor competition and assure unbiased assessment.
Consultants, procurement and project managers are most likely to write a BI RFP.
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What To Include In an RFP
Write a professional-looking request that includes the following sections. You can omit any areas that aren’t applicable.
1. Title Page: It should include your company’s name, document title, the issue date and a serial number.
2. Change Log: It’s a table to record the date of change and version number as the RFP undergoes revisions.
3. RFP Overview: This section briefly describes the required BI system’s functionality and features.
4. Company Overview: It includes information about your organization’s values, mission, vision, industry, size, location and company-specific details pertinent to the required BI system.
5. Project Scope and Requirements: It’s the most crucial section explaining your organization’s needs regarding BI functionality and budget.
6. Proposal Submission Guidelines: This section includes details on submitting a proposal, including the following points.
- Proposal submission date and time.
- Mode of submission — email or website.
- Acceptable file size, format and type.
- Mandatory sections.
- Steps to get clarity on the submission process.
- Deadline to submit queries, if any.
- An explicit confirmation that the RFP isn’t a contract and is subject to change and alteration.
- A tentative date range for product demonstrations.
- The date of decision.
- The date of finalizing the contract.
- The planned deployment date.
7. Evaluation Criteria: Use this section to inform vendors about how your evaluation team will assess the submitted proposals.
Include a pointwise breakdown of product evaluation parameters so vendors know which areas to focus on when forwarding a proposal. Functionality, support, pricing and deployment assistance are primary considerations.
Describe how you’ll decide the final ranking and whether demos and proof-of-concept will garner extra points. Product demos help you learn about the BI platform’s features.
Ask for references and testimonials in this section.
8. Terms and Conditions: Mention that you’ll invite the highest-ranking vendor for contract discussions and what happens if you can’t finalize the contract.
Detailed specifications improve the chances of receiving precise and relevant proposals. Our Procurement RFP article provides an excellent example of what to write in an RFP.
The Process
A request for a proposal benefits buyers and sellers as all the info is available in one document, helping them decide if one can fulfill the requirements of the other.
Define Your Requirements and Criteria
Assign a person or team to manage the request process and engage key stakeholders in requirements gathering. Does your organization need a big data analytics tool or a reporting platform?
- Cloud deployment, data warehousing, big data integration, enterprise reporting and dashboards are features common to BI platforms.
- Data management is a significant component of business intelligence software.
- In addition to ease of use and integration abilities, BI software shoppers need tools to handle the amount and type of data their system will process.
- You’ll need to find a vendor that can connect to your company’s databases, pull data from third-party programs and seamlessly mesh with your current data infrastructure.
Define your unique business needs with our Requirements Hub.
Use our requirements checklist to build and prioritize your desired BI features, or get free access to our Express App to generate a feature-by-feature comparison scorecard of your preferred products.
What else do you need?
- Get acquainted with your company’s vision, values, mission, and stakeholder pain points and expectations.
- Determine the procurement timeline from senior management and the budget figures to include in the request document.
- Prepare detailed proposal submission guidelines and get approval on them. Ask your manager which contract terms to include.
Though not all RFPs are legally binding, any contract terms or language discrepancy can incur liability, so pay special attention to the language and review it carefully before sharing the document publicly.
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Import Requirements Into a Formal Document
Once you’ve established and ranked your BI requirements, integrate them into your formal business intelligence proposal.
Create a professional-looking request document that includes your project goals, an intro to your organization, and your outlined requirements.
An RFP platform assists in creating the request document through guided workflows and ensures you include all components.
Share the RFP With Target BI Vendors
Make the document public via a web page or email. Or opt for RFP software to manage document creation, vendor management and BI proposal evaluation.
As in the request-building process, a BI proposal tool will help organize vendors and keep you on top during the vendor contact process.
Capture and organize the received BI proposals in a separate folder for record purposes.
Review Vendor Proposals
Once you share your request for proposal with your chosen business intelligence vendors, they’ll respond with the details of available features, user support options, pricing and implementation procedures.
They may also have questions. You can reply to each vendor immediately or wait until after the submission deadline. Either way, immediate responses help avoid delays in the selection process.
The screening process can involve scoring vendors on a number-based scale or internal discussions to clarify technical details, identify mistakes or discuss vendor quotes.
Compare and shortlist vendors with our ranking system.
After reviewing all the responses, you’ll want to move forward with the BI vendors that best meet your criteria.
Getting proof-of-concept and demos would be an excellent next step if you’re still deciding between a few vendors. A proof-of-concept allows you to see the software in action and assess its ability to complete specific tasks.
Ask for a demo to see the product in action.
Real-life examples of system capabilities will help you imagine the software in your everyday work, facilitating a final decision.
Negotiate and Sign the Contract
Once you’re satisfied with a vendor’s demo and proof of concept, add them to our shortlist. Shortlist up to three vendors for pricing and contract discussions.
Pricing can be a significant differentiator for software buyers. Even if a vendor offers all the necessary features, implementation isn’t possible if it doesn’t fit your budget.
If you have already chosen a vendor, hash out the contract details and terms of agreement with them and finalize the implementation details.
You can create a plan for bringing the software into your organization and discuss how the vendor will assist. Many vendors offer installation support and training with the product package.
What Is an RFI?
A request for information (RFI) is a formal document used to gather information before issuing a request for proposal.
An RFI may be helpful to businesses that need a new system but aren’t aware of a solution.
- An RFI is a preliminary step to sending a formal request for proposal and has no fixed format. It’s non-binding, unlike a request for proposal.
- A request for information isn’t as detailed as an RFP and includes basic company details, a request to the vendor to enter information about their product and a confidentiality agreement.
- Requests for information usually consist of requirements with little knowledge of helpful features.
What Is an RFQ?
A request for quote (RFQ), called an Invitation for Bid (IFB), is a document a buyer sends to potential vendors requesting detailed pricing information for specific goods or services.
As a BI software buyer, you’ll use an RFQ when you clearly understand the product or service you’re getting and want to obtain competitive pricing from various suppliers.
An RFQ/IFB contains essential information, including product or service specifications, the required quantity, delivery and payment terms, evaluation criteria and submission timelines.
You can send an RFQ before an RFP, with it, or separately to existing suppliers for new orders.
An RFQ is a standard document companies send when the product quantity and deliverables are known.
On the other hand, a request for a proposal is helpful when seeking new suppliers and projects when you aren’t aware of the deliverable quantity and the pricing terms.
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Next Steps
It’s imperative for companies using business analytics to master the art of creating effective business intelligence RFPs.
A BI request document initiates an open dialogue between businesses and potential vendors and sets the foundation for a successful, long-term partnership based on mutual understanding and aligned goals.
Need help? Automate RFP/RFI creation with our Decision Platform to maximize your data technology investment. Acquire and deploy software cost-effectively with detailed cost-of-ownership reports.
Would you like to share your successful BI request processes? How do you ensure a transparent software selection process? Let us know in the comments.