How to write an RFP: process, scope, template

I’ve been working on software development projects for many years and can confidently say that transparent communication between the customer and the development team is one of the main factors of success.

A correctly asked question is half the answer. A correctly written task by the customer is the key to a good and accurate proposal from us, developers. In the end, it is a basis for delivering  the project on time, within budget, and with high quality.

This initial statement of the problem, intended to be sent to the developer, is formed in a software RFP (request for proposal).

In this article, I will explain RFP meaning and tell you how to write an RFP in order to obtain the most detailed information from a potential partner and conclude a contract on the most favorable terms. Based on 13+ years of experience in product development, I will suggest what should and should not be included in RFP and provide a sample of IT RFP which you can use as a template.

What is RFP?

The RFP is a document in which the organization describes the specific features of the project and sends it to potential vendors so that they submit their proposal for the implementation of this project.

The RFP describes the goals of software development, a scope of tasks, potential challenges, and the desired result. A company can send RFP to as many potential contractors as needed. Having received a response to the RFP from different vendors, the company can choose the best offer from the perspective of price and expected quality.

Request for proposal is actively used in software development outsourcing. 

Companies that do not have in-house development expertise often look for external contractors that can develop a project from scratch or implement specific functions or technologies. Among the many providers involved in software development, it can be challenging to choose the right vendor. Even after reading reviews and exploring portfolios, it will be difficult for you to assess how this particular company suits your specific project.

The RFP response software shows the potential partner’s train of thought and reveals their expertise. With the help of RFP, you can see how the company will behave in a given situation, what technological decision it will make, and how it will justify the prices it sets.

By creating an RFP, you will have a wide choice among potential contractors. You can immediately discard irrelevant offers, compare the prices of the vendors you like the most, and ultimately sign a contract on the most favorable terms.

Why you need request for proposal

In short, you need an RFP to get the best technology partner in the shortest possible time.

There are two ways to find a software development provider:

1. Independent research and selection of candidates
2. Drawing up the RFP and evaluating the proposals received

Both options work, but the first option takes more time, especially if you are not familiar with the available vendors and their expertise.

Imagine that you need to collect a list of potential partners. Next, you should examine each candidate’s website and compose a message. After this, you will most likely need to speak with a representative from each company. If you have about a dozen such companies, then communication will take a lot of time and success isn’t guaranteed.

With the RFP process everything is much simpler and faster. You describe the project and the questions that interest you once. Next, you send your “questionnaire” to the selected companies. After receiving proposals, you select the most relevant company, contact the company representative, and start the project.

RFP vs. RFI vs. RFQ

If you are researching the topic of how to write an RFP, you have probably come across the concepts of RFI (Request for Information) and RFQ (Request for Quotation). Before starting the RFP process, it’s necessary to understand the difference between RFP, RFI, and RFQ meaning. In some cases, it is more appropriate to develop RFI and RFQ than RFP.

So,

RFP is sent to get a detailed proposal from potential vendors. It usually has an in-depth description of project scope, technologies, deadlines, and budget constraints.

RFI is composed with the aim to gather information about vendor’s services. It provides you, as a business owner, with preliminary understanding for what the vendor can and cannot do. Based on this information, you can then decide if it’s necessary to send an RFP to the particular vendor.

RFQ is developed to gain price quotations for typical, off-the-shelf services from a potential technology partner. It is suitable for small and medium projects with standard requirements.

You can see a detailed comparison of RFP vs. RFI vs. RFQ in the table below.

Step-by-step guide to RFP process

Before we proceed to the question of how to write an RFP, let’s review the entire RFP process. Based on my experience, I provide RFP process best practices and steps so you get the best outcomes from your efforts.

Step 1. Determine the goal of the project

Remember that the goal of a software development project is the effect you expect to receive after implementing a digital product. For example, if you are developing a fintech application, your purpose is not to launch the app, but to provide customers with financial services in a modern digital format. If you integrate the card issuing functionality, your goal is not to increase third-party integrations in the application, but to strengthen the brand by providing additional services to customers.

Make sure your goal is measurable. For example, if you want to attract new customers, then indicate that you want to attract new customers in an amount of, for example, 20% of the current customer base. If you want to increase sales, then specify that after the launch of the product you expect, for example, a double increase in sales compared to the current period.

Formulating goals can be challenging, especially for those with a background in IT rather than business. Sometimes, people reach this stage only to realize that their project is unnecessary. Thus, crafting goals correctly is not just crucial for project success; it also provides an opportunity to abandon unnecessary projects in a timely manner :)

Step 2. Define the RFP writer(s)

An RFP is not just a vague message to random developers, but a well-structured document with project requirements addressed to service companies with the appropriate expertise.

If you want to find a reliable technology partner, it is important to put effort into describing project details and writing an efficient RFP document. The ideal team for RFP development includes a technical expert, a business development specialist, and you, as a business owner. Of course, these roles may vary from company to company. Often, the owner performs the functions of business development. In many cases, the owner acts as CTO and CEO.

In fact, the distribution of roles in the company does not matter much during the RFP process. What matters is that the people (or a person) writing the RFP bring the business and technical expertise to the table. If this condition is met, then the software RFP will be clear to developers, and the completed project will benefit your business.

Step 3. Write RFP

After you have determined the goals of the project and people responsible for writing the RFP, it is time to move directly to creating an RFP. At this stage, a sample IT RFP or software RFP  template can be helpful. There are many free templates on the Internet, so you can choose the one you like. I will also provide a software RFP template later in this article; you can use it if needed.

If available samples of IT RFP don’t meet your project needs, you can create your own software proposal format and structure.

In general, there is no single correct answer to the question: how do you write an RFP? Also, there are no strict RFP requirements.

You can compose a document structure and fill it with content as per your needs. The requirement is, however, that your request for proposal clearly conveys what kind of product you want to create and what results you expect to receive.

Step 4. Send RFP to selected software development providers

The most effective way to find the right partner is to send an RFP directly to this partner.

By contacting the vendor directly, you show your willingness to order development services from them and encourage the company to create an attractive proposal in the shortest possible time.

Alternatively, you can also place the request for proposal on your official website or on specialized platforms. In this case, it may take longer to find the right partner, and you may also receive irrelevant offers from irrelevant vendors. This passive method of search works best as an additional way for vendor selection. It is also suitable for projects without strict deadlines.

Step 5. Select your technology partner and sign the contract

Don’t rush to make your final choice after you have received several offers. As a part of your RFP evaluation process, select 2-3 most relevant proposals and contact representatives of their companies. When communicating in person, agree on prices, deadlines, communication process, and desired results. Ask more about the company’s corporate culture and get to know the team members. 

After such communication, weigh the pros and cons and make a choice in favor of the company that best meets your requirements. Send them the contract and proceed to project development once it is signed.

Don’t forget to notify not selected companies about your decision and explain your choice to them.

Essential RFP elements

I would like to point out that there is no generally accepted or regulated process for writing a software development business proposal. Each business decides independently how to prepare RFP and what questions to include in it.

However, based on my experience, I’d like to share the key points that should be included in your RFP to get the best software proposal.

Company description

Start your RFP with a short description of the company. This will help a potential vendor immediately understand your domain and get a more complete picture of the specifics of your business.

Tip: Keep and short and precise. Imagine that you need to do a 30 second elevator pitch.

Example

ABC is a payment service provider based in Malmö, Sweden. Our mission is to make digital payments accessible to everyone and promote financial inclusion. We’ve been on the market for three years. During this time we’ve helped 100+ companies enhance their business with digital payments. We see our way in further popularization of digital payments, including instant transactions and cross-border payments.

Project overview and goals

Here you need to briefly describe what your project will be about and with what purpose you want to implement it. In this section of your request for proposal software, you don’t need to define the specific works and tasks expected from the vendor. However, you should specify what results you are going to achieve and what vendors you intend to cooperate with.

You can specify the following points:

• Vendor profile
• Product idea
• The processes you are going to improve or automate
• Current processes and flows
• End users of the product

Tip: Strike the right balance being concise and providing sufficient information. Try to convey the main idea, but don’t let your thoughts spread out.

Example

The purpose of this request for proposal is to invite software development companies specializing in fintech to help us integrate artificial intelligence (AI) in the transaction processing and fraud prevention. Currently we have an automatic “if, then” mechanism to accept or reject specific payment transactions. We would like to incorporate AI to have bias-free and secure transaction processing. We imagine that AI will help us behind the scenes and the user won’t see any difference when it comes to executing payment.

Project scope

This is the main part of your RFP for software development. Here you should clearly formulate what work must be performed and what processes must be established. You also need to describe the current stage of the project and specify what has already been done, what needs to be redone, and what should be developed from scratch.

Tip: Break project scope into sections. This will make it easier for the contractor to navigate the tasks and evaluate technical feasibility and timelines.

Example

The selected fintech development provider will be responsible for developing and training machine learning (ML) models and integrating intelligent algorithms for identifying fraud in payment transactions. We expect that our technology partner will implement the following:

Project infrastructure

We are currently running our application on AWS. We expect the AI/ML algorithms to run on the same infrastructure, however we are open to discuss a multicloud model if it provides us with significant cost savings and high performance indicators.

Background process

We expect the card issuing bank to be notified immediately when a suspicious transaction is detected. It must receive this notification before beginning to process the transaction and should block it until all the circumstances are clarified.

Use experience

The user should not feel any difference with the current payment process. However, if the transaction is declined, they should receive a notification explaining the reason for rejection and a brief recommendation of what they should do next. For example, they may be asked to verify their identity, pass multi-factor authorization, contact their bank, etc.

Analytics

Our system should automatically generate weekly reports about rejected transactions, with a breakdown of specific reasons why they were rejected. We also need insights about false positive fraud cases. Additionally, we need an option to generate reports manually for any period.

Project management

We want to completely outsource the implementation of AI/ML into our payment product to an experienced fintech development provider. We expect the company to appoint its own project manager who will regularly update us on the progress of the project. We usually work by Scrum, but we are ready to discuss other PM options if they are more suitable for our project. Please send your vision in the RFP response software.

Quality assurance

We expect at least 90% accuracy of the results of the implemented AI/ML model, so we are ready to allocate significant resources for testing and quality assurance. We want testing to be carried out both automatically and using manual methods. Please describe your testing approach and expertise in AI testing in your software development proposal.

Potential challenges

In this part of the RFP template, you need to describe the challenges and obstacles that the team may encounter on the way to implementing the project. It is important to indicate even those challenges that seem obvious to you. This will help avoid misunderstandings and get all participants in the process on the same page.

Tip: Be honest with your contractors. It’s better to talk through all the challenges in advance than to face the impossibility of implementing the project halfway through.

Example

The AI Act mandates that fintech companies establish a risk management system to minimize issues linked to their AI-powered fintech platform. It also requires fintechs to enforce strong cybersecurity measures.

Vendor requirements

Сlearly define the criteria by which you will choose a software development provider. Use no more than 5-6 criteria so that the company can quickly determine whether it meets your expectations.

Tip: Encourage companies to submit RFP responses, even if they tick all the boxes. Sometimes, the most profitable offer comes from an unexpected direction and results in fruitful cooperation.

Example

1. Expertise in fintech software development, particularly in implementing AI-based fraud detection features in payment processing systems.
2. Demonstrated experience in developing and training machine learning models for fraud detection.
3. Portfolio of completed fintech projects
4. Strong background in project management of fixed-price projects
5. Compliance with regulatory requirements such as PCI DSS, GDPR, and AI Act.

Software proposal structure 

Describe in what form you expect to receive an RFP response software. For convenience, list the sections that the vendor should include in their document. These could be:

• Company bio
• Product vision
• Project development plan
• Project milestones
• Technologies to be used
• Team composition
• Project management system
• Risk management approach
• Cost breakdown
• Case studies of similar projects
• References

Tip: Encourage the company to provide any extra information in their RFP responses if they consider it important. Such information can give you valuable insights about how potential cooperation will go.

Submission deadlines

Indicate the final date for submitting a response to the RFP for software development. Consider setting realistic deadlines. For example, for small and simple projects, it is usually needed from two weeks to a month to write the proposal. For more complex projects, drawing up a software proposal may take two to three months.

Also, in addition to the deadlines for sending proposals, you can indicate the deadlines for

• development team gathering
• start of project development
• signing the software development contract

Software RFP template

As I have already mentioned, there are no strict requirements on how to write an RFP. By understanding RFP meaning and purpose you can create a request for proposal using any software RFP template you like.

However, in this article, I would like to provide a sample IT RFP which I think serves best for formulating clear and structured requests to a software development provider. You can find a free RFP template in the end of this article and download it by clicking the corresponded button.

You can utilize this software RFP template when you compose your request for proposal for the first time. But I suggest customizing your RFP to clearly express your company’s requirements.

Tips on how to prepare RFP that attracts right vendors

What is an RFP? A document where you describe your project to potential contractors.

What is the purpose of the RP? Enter into an agreement with a contractor who will complete your project efficiently and within budget.

Based on the above, consider the following points when creating an RFP:

• Be clear. Use matter of fact language, don’t get lost in thought, and provide the potential partner only with valuable information.
• Write in human language. Imagine communicating live with developers to explain what needs to be done. Now, write the same in your sample IT RFP. Don’t use complex, confusing phrases. Be concise and precise.
• Make your RFP scannable. Break your RFP template into sections and subsections, highlighting the most important things in bold. This will help vendors quickly understand the essence of the proposal and also quickly refresh their memory after some time.
• Separate the must-have and nice-to-have requirements. Describe what you need to do on the project first and what you would like to add later. Such prioritization will help developers break down their price proposition into basic and extra packages, so you can decide if they fit your budget.
• Focus on results and not on how to achieve them. Clearly describe the outcome you expect from the upcoming project and let developers suggest ways to achieve your goals. This will help you evaluate their problem-solving approach and compare technology solutions from different vendors.

Conclusion

An RFP is a quick and effective way to secure a contract with the right software development provider. RFP helps to evaluate the technological expertise and approach of a given company, and allows you to compare price offers from different vendors.

Writing the right RFP is already half the success. The other half is sending it to the right software development provider.

At DashDevs, we have 13+ years of experience in developing fintech, ecommerce, healthcare, media, and hospitality software solutions. Our cooperation models include outsourcing and outstaffing. We work with start-up companies and established businesses.

If you are looking for a reliable partner for the implementation of your project, do not hesitate to contact us. We will be happy to review your RFP and send you a detailed software proposal with a development plan and prices.