Your Guide to Software Selection

ERP RFP Template and Step-by-Step Guide

According to a 2018 report from Panorama, 28 percent of respondents described their ERP software implementation as a “failure.” What’s more, that’s a two percent increase in the rate of reported failures from their study in 2017. While nobody has all the answers on why the failure rate is so high, one reason may be that businesses simply don’t have enough information to make an educated decision.

As such, it’s exceptionally important for buyers to perform extensive research before choosing which vendor is right for their business. But there’s only so much information available online. This means that down the line during your ERP selection, you’ll need to opt for a formal request for proposal (RFP). To help you get started, we’ve created a step-by-step guide on how to write an RFP, including an ERP RFP template that makes submitting to vendors especially easy.

What is an RFP?

RFP is one of many similar acronyms used to describe the type of information a buyer is requesting. And while we’re only focusing on building your RFP for ERP today, it’s helpful to understand all the RFx acronyms to give you a better context of exactly what you’re looking for. If you’re already familiar with these terms, feel free to skip to the content below.

Request for Information

This is the first request ERP buyers make to software vendors and is typically much broader than later RFx. This is used by companies not overly familiar with the current marketplace with either no previous experience with an ERP or only experience with a legacy system. These are usually sent out to many different vendors, detailing some general challenges you’re looking to overcome with a new software system. The software vendors, in turn, should write a response back broadly explaining what they can offer.

Request for Proposal

An ERP request for proposal is similar to an RFI but much narrower in scope. With a general understanding of the market with an RFI, you should formulate your RFP with specific challenges your business is trying to overcome and specific goals you’d like to achieve. This is where you’ll use your list of requirements, which we’ll discuss further in just a little bit.

The vendor, in response, will offer up some plans and ideas on how their product may be able to help your business move forward.

Get our ERP RFP Template

Request for Quote

Sometimes referred to as Request for Quotation, RFQ is what you’ll want to send out when you’ve narrowed down your list of potential vendors. Most shortlists consist of three to five vendors, but some shortlists may have eight or more vendors depending on a few different factors. It’s really up to your business to determine how many vendors belong in your shortlist. You want to make sure you’re not comparing so many you start to lose track, but you should also include a couple alternatives in case your stakeholders dislike one or two listed. RFQs are the narrowest in scope and should provide buyers with information on technical specifications, deployment methods, payment terms and other specifics. Our RFP template gives you a sense of what a ERP quotation sample looks like.

How to Create an RFP (And What to Do After)

To procure an ERP system that best fits with your organization, we recommend following these five essential steps for an ERP RFP project:

Step 1: Establish Internal ERP Requirements

The first step in launching a successful ERP RFP is establishing your organizational ERP requirements. Requirements are the features, qualities and other broad capabilities a software vendor must provide in order to meet your needs. You don’t have to list out each requirement as a specific feature, but this can help you get the exact type of system you’re looking for if you’ve done your research.

With SelectHub’s requirements planning tool, you and your stakeholders are on the same page each step of the way

Get all decision makers involved to help prioritize your most important ERP requirements. This includes the employees using the system on a daily basis as well as leaders within your company. Make sure you include input from all teams needing to use the system but also all teams affected by a new system. You can set up interviews, focus groups or even send out email surveys to gain an understanding of what your company needs from its next solution.

Then it’s time to decide how you will create your requirements checklist. Getting your most important ERP requirements established in a formal document will aid in the next steps in the RFP process. Often organizations start with an ERP proposal sample, but we highly recommend you do the full requirements gathering exercise instead. See our ERP requirements checklist for examples of what you could include in your own list.

Step 2: Build your ERP RFP

Once you’ve compiled and ranked your list of ERP requirements, it’s time to build these into your ERP RFP. By doing so, the responding vendors will answer how they plan on meeting the ERP criteria you’ve outlined.

Make sure the RFP for your ERP selection process is professional looking and organized. Not only is this courteous, but it also shows vendors your company is serious about seeking out the best system. Further, you may want to consider submitting your RFP for ERP systems through a software platform designed to manage RFPs. This way, vendor responses (see Step 4) can be auto-compiled, tabulated and analyzed easily.

You should also include as much relevant information about your business as possible. You want the vendors to fully understand how you operate, what your brand is and who your target audience is so they can come up with a completely detailed proposal on how to meet your goals. Include what services and other deliverables you offer to your clients. It might also be helpful to include information on expected timelines, your budget and technical specifications.

If you don’t have anyone on your team with enough technical knowledge to include this part on your RFP, we recommend finding someone within your company to perform this role or outsource it. It is software after all, and vendors will have a hard time creating an accurate proposal for your business if they don’t have any technical information.

Get our RFP ERP Template for ERP Software Selection

Step 3: Identify and Submit to ERP Vendors

Once your organization has formulated a comprehensive RFP, select a shortlist of vendors and invite them to your RFP. Your initial RFI should’ve helped you better understand the ERP market enough to identify three to five vendors. If you’re still uncertain which vendors to send your RFP to, it’s likely your original RFI was too general and didn’t elicit informative vendor responses.

If this is the case, you may want to pause the RFP process and assess the situation. You may even want to begin the RFI process over again. While this might seem time-consuming, it’s best to extend your research timeline rather than push forward and invest in an ERP poorly suited to your business.

Once you’ve created a shortlist you’re somewhat certain about, it’s best to use a specialized RFP ERP management tool. Tools such as these make it easier for vendors to respond as well as allowing you to manage these responses in a centralized interface. We suggest using our customizable ERP RFP template to get started. Our RFP template for ERP software allows users to prioritize requirements, receive validation from stakeholders and then assess vendor feedback within the program. Running RFP projects through SelectHub saves organizations 50 percent of the time normally spent on a start-to-finish RFP.

Asking ERP vendors to reply to an RFP is a time-intensive process. Make sure you’ve defined your requirements well and have made it simple for vendors to submit their responses. For more in-depth advice, read our ERP Software Selection Process and Quick Start Guide.

Compare Top ERP Software Leaders

Step 4: Review RFP Responses

Traditionally, technology buyers have to wait until they’ve gathered all vendor responses before doing a full RFP assessment. This lengthy process happens because of the manual procedures required to compile all of the responses for comparison. Your team may have to reconcile differences in response format to make the feedback compatible during a comparison.

However, there are options available to streamline this part of the RFP process. With new software available for your IT procurement process, you can evaluate and auto-compute vendor responses as they arrive. This is a great way to free up time and allow your staff to focus more on their main roles and responsibilities. Everyone knows ERP projects are lengthy and use a lot of resources, but it’s not impossible to optimize your team’s efficiency during this time. Further, new tools like these provide a more streamlined method of responding to vendor questions and allow you to quickly eliminate unqualified vendors.

RequirementsHub allows stakeholders to review potential vendors collaboratively

Compare ERP Pricing & Costs with our Pricing Guide

Post-Evaluation

Along with reviewing their RFP responses, most companies will receive in-depth product demonstrations, seek out customer references and negotiate contract terms before making a final decision. It’s also courteous to inform eliminated vendors of their status.

Use RequirementsHub to directly contact vendors for demos and other activities beyond RFx

In addition to managing your RFP process, SelectHub also offers a free comparison report of the top ERP vendors in today’s market. This is a great resource for those unsure of which vendors they’d like to send their RFPs to or buyers who’d simply like a little bit more insight. Our analysts have evaluated and ranked each vendor on how well they provide high-priority capability like accounting, human resource management, distribution and more.

Get our ERP Software Requirements Template

Conclusion

Ultimately, buyers get as much out of their RFP process as they put into it. If you put more effort into creating RFPs and evaluating the responses, you’ll gain a much more accurate understanding of how your shortlisted vendors can support your operations.

Have any other tips on RFPs you think we should include? Let us know your thoughts by leaving a comment below!

Kim O'ShaughnessyERP RFP Template and Step-by-Step Guide

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  • steve case - April 27, 2018 reply

    Looking to purchase RFP (E-Procurement) system

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