Your Guide to Software Selection

How to Create a Transportation Management System RFP

We take a lot of things in life for granted. One the biggest is how much we depend on transportation management systems (TMS). TMS software enables shipping to happen in a streamlined fashion — which is how things like groceries get to your local supermarket on time.

Because the TMS is a crucial link in the supply chain, it’s important that you choose the right solution for your organization. One tool at your disposal is the transportation management system RFP.

How do you put one together? What are the pitfalls you should be wary of and benefits you can expect? Read on to find out!

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What’s an RFP?

Before we get started, let’s get clear on what RFP means, along with its closely related cousins, the RFI and RFQ (so many acronyms!). If you’re already up to speed, feel free to jump ahead to the next section.

Request for Information

After mentioning grocery stores, let’s keep the food theme going, so here’s a fishing analogy. The RFI (Request for Information) is similar to a huge fishing net that covers a wide area and catches anything that swims inside it. In the same way, an RFI is the broadest of the RFx cousins and captures the widest range of information.

Sending an RFI is typically the first step in your research, outside searching Google and visiting vendor sites. In some cases, being familiar with or experienced in your industry removes the need for an RFI. Really, your goal here is to start big and work inward to get a feel for the industry — the vendors, market landscape and various solutions available.

Because transportation management has a lot of components, you’re probably best off using an RFI even if you’re already familiar with the TMS industry (more on that in the Special Considerations section).

Request for Proposal

If the RFI is the equivalent of a commercial fishing net, your RFP is more like the handheld fishing net Grandpa would use at the lake every summer. You bring in less information but it’s more precise.

Thanks to what you found from sending RFIs, you should have a handful of vendors that you want to do deeper research on. That’s where your RFP for TMS software enters the picture.

The best practice for an RFP, no matter the software, is to be specific. Instead of saying things like “need modern solution,” drill down and talk about how your challenges include not being able to accurately track your cargo or needing to process your order information manually.

That level of detail makes it much more straightforward for vendors. They can look at your challenges and respond with the same amount of detail, explaining how their solution will solve your issues. For example, their software uses EDI (electronic data interchange) to facilitate automated data entry.

Also be clear about your goals, which will set the stage for vendors to reply with personalized outlines of the ways they can partner with you to enable your goals to become reality.

Request for Quote

Finally, we have the Request for Quote (which also goes by Request for Quotation). To finish the fishing analogy, the RFQ is like casting a few individual lines into the river. You’ve narrowed your scope even more with the RFP, so now you’re looking to get into the granular details with the few vendors you qualified.

Here, you’ll ask about software characteristics, categorizing them as either mandatory requirements or desired requirements. Here are a few common ones:

  • Implementation process
  • Cost
  • Deployment method
  • Integration capabilities

You’ll also set a response timeline. As with the RFP, you want to be thorough enough that the vendor shouldn’t need to clarify anything.

Special Considerations for TMS

Before we look at the steps you’ll take to create your RFP for TMS software, there are a few industry-specific considerations you should know about.

According to J.P. Wiggins, the traditional RFP process won’t cut it when it comes to selecting and buying TMS software. That’s because unlike other software such as CRM or project management, TMS brings a world of complexities that are beyond the scope of an RFP. It’s impossible to get an accurate idea of whether a system with so many variables will fit your organization’s needs by merely looking at a checklist.

How do you solve that problem? Wiggins says companies need to avoid the following errors:

Focusing merely on what a solution will do. Rather, you need to understand how it’ll perform specific actions. Beyond the RFP, sending RFIs are a good way to find your shortlist. Even so, don’t skimp on in-person research such as demos and scenario walkthroughs. Those will give you a clearer picture of how the software will contribute to the unique needs of your business.

Looking at customer references wrong. Look for a vendor who’ll be a partner, not just a supplier. And when you check references, dig deep to get past the raving reviews. You want to find the unhappy customers. That’s where you’ll strike gold in terms of uncovering what a vendor’s really like.

Depending on a checklist. In reality, searching for a new TMS solution requires an extensive amount of research, so be sure to perform due diligence when looking at vendors.

Given all that, is an RFP even worth it? Yes, they’re still valuable. The goal isn’t to ditch your TMS RFP entirely — it’s to add extra layers to your research and analysis process so you cover your bases. In other words, don’t rely solely on an RFP to do the heavy lifting. To find the best solution that matches your requirements, you have to do your homework.

One final thought: if you already have a TMS and are looking to switch systems, it’s useful to include your current software functionality as you compare options. This gap analysis will reveal where solutions are too similar to yours (and therefore insufficient) or where they exceed your current capabilities.

With that in mind, let’s move on to getting your RFP built and sent out.

How to Create and Manage Your Transportation Management System RFP

Putting together an RFP, especially for a system as complex as a TMS, takes some time and effort. The good news is that it’s a straightforward process. First, we’ll look at the steps necessary for creating your RFP. Then we’ll examine how to send it and follow-up with return proposals.

1. Gather Your TMS Requirements

Your RFP will only be as effective as the requirements you include, so take your time with this step. Here are some of the major requirements you won’t want to leave out:

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  • Shipment Consolidation
  • Performance Tracking
  • Auto Carrier Selection
  • Dispute Management
  • Billing Support
  • Automatic Order Processing
  • Cargo Tracking
  • Driver Dispatch
  • Reports
  • Business Intelligence

Another important part of gathering your requirements is including relevant decision-makers in the process. You need input from all the teams who will use or be impacted by the software. The more information you can put in, the less chance you have of overlooking critical details. Since each department will focus on certain aspects of the solution, you’ll gain a comprehensive picture of your criteria.

RequirementsHub provides the tools to begin building your RFP and sharing with stakeholders.

Our TMS requirements template is a great way to centralize communication and enable stakeholders to shape your system priorities.

2. Create Your TMS RFP

This is where the rubber meets the road. (Yep, pun intended.)

If you were thorough in listing your requirements, that will make this step much less labor-intensive. However, you can’t just copy and paste your requirements and call it a day. The goal of an RFP is to delve into as many particulars as you can. That means you also need to incorporate relevant company information.

You want to make it easy for vendors to make a proposal that suits your company and shows how they can help you attain your goals and solve your challenges. They won’t know what to include if you skimp on your info. Include things like the size of your business, how you operate and anything else that will aid them in better understanding your unique needs.

Your RFP should be professional. It’s a formal request, so there’s no room for disorganized data or a jumbled layout.

In addition, using a platform to manage your RFPs will streamline the process and give you control with features like automatic compilation and analyzation. Depending on how many RFPs you send, this could save you valuable time and prevent your search from eating into your other responsibilities.

3. Identify Vendors and Send Your RFP

It’s submission time! By now, you should have a handful of vendors you want to contact, based on your RFI and other research. That additional detective work could include talking to contacts in your industry who’ve gone through the process. If Joe at Company X was involved in buying a TMS solution last year, he’ll have great insights to share. It’s a quick way to jumpstart your search and eliminate vendors who aren’t a good fit before you waste resources.

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When you’re ready to send RFPs it can be tempting to compile a big list, but that can backfire. You’re better off limiting the number of suppliers you send your RFP to.

Why?

Properly evaluating each proposal is a time-consuming process, and chances are no one at your company has the time to wade through a pile of proposals. It’s also costly, so why send 15 RFPs when you’re only considering six vendors?

There’s no magic number, but you want to ensure every vendor you contact is qualified. A good rule of thumb is that less is more. In most cases, you should stay below eight.

When it comes time to submit your RFPs, using software to manage the process is once again a good idea. You’ll be able to track the status of each RFP, manage the incoming proposals and send replies from one location.

View potential vendors and invite the feedback of your team with SelectHub’s collaborative platform.

Our RFP template for TMS gives you full control over the process. Easily track financial and stakeholder validation as well as review responses in the system. By using our platform, you can expect to save 50 percent of the time it typically takes to manage an RFP from start to finish.

4. Review and Respond

Typically a few weeks after sending your RFPs, you’ll start to receive proposals. It takes time for vendors to compile a response, so prepare yourself to be patient (take that into consideration when planning your selection timeline). And as I mentioned, reviewing the proposals isn’t a quick job either. Give your evaluation team adequate time to give each proposal the attention it deserves.

This in-depth review process will reveal an overview of how vendors compare to one another, as well as how they each fulfill your expectations or fall short.

More telling than the responses, perhaps, is the information vendors don’t include. Do some leave gaps that don’t address your particular circumstances? Take unwritten implications into consideration as you examine each response.

As you examine proposals, consider more than whether the features tick your boxes. You need to weigh whether a system fits in your budget, if its usability aligns with your needs and how much risk it involves. If you don’t take those into account, your organization may end up burdened with a system that, while feature-rich, erodes your financials, slows your operations and presents unhealthy risk.

Depending on how thorough your RFP was, vendors may have questions you need to clarify. Because of that, you’re better off responding to proposals on-the-go to avoid slowing the process down, rather than waiting for each one to come in and then batching your replies.

How to Follow Up

This is where the advice from earlier comes into play. Go above and beyond what you think is necessary, and gain as much firsthand information as you can.

  • Schedule demos where the information on paper (or your screen) comes to life in real-world examples.
  • Ask for walkthroughs so you can see the software in action and understand how its features apply to your specific operations.
  • Get customer references to gauge how other companies feel about their solutions and the vendors capabilities.

Check things like how often the vendor updates their TMS and how they train users after that happens.

Review your RFP with vendors, request demos and discuss pricing.

It’s also smart to know how they handle implementation:

  • Do they conduct the implementation in-house or not? If they outsource, see if they have suggested service providers.
  • Is the solution compatible with your existing software? If integrating your TMS with other systems won’t be easy, you could be staring down the barrel of an expensive, time-consuming problem.

Finally, always be thinking of “how.” Yes, the solution supports multimodal shipments, but what are the ways it makes that happen in real life? When it comes to TMS, you can’t afford any gray areas. If a feature or element isn’t crystal clear, keep researching and asking questions.

As a courtesy, let vendors know when you remove them from the running. They spent time and money developing a proposal and deserve to know where things stand.

After you make a decision, the last piece is negotiating and finalizing the contract. Here, you’ll want to ask the vendor about their policies for support during implementation, along with training to ensure your teams don’t encounter bumps along the way.

Make the Selection Process Easier

If the steps listed above sound like a lot of work, that’s because they are. It takes time and effort to properly manage the RFP process. Often, companies waste money and spend too much time selecting new software.

Here at SelectHub, we want to take some of that burden off of you. Our comprehensive RFP software platform guides you through the whole process, from gathering requirements to shortlisting vendors to managing your RFPs.

You can streamline tasks and reduce how long the entire process takes by up to 50 percent. Win back more of your time, save money and end up with a solution that’s a perfect fit.

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Summary

TMS software is complex. As such, you’ll need to dedicate sufficient time to finding the solution that’s right for you. The last thing you need is software that you implement, only to find it doesn’t improve your business and sends you back to where you started. What’s more, your TMS is one of the most critical aspects of your supply chain. Get it wrong and you’ll be facing a ripple effect that could create tsunami-sized problems.

It’s a daunting task to find the best system. To aid your TMS selection process, get our free TMS comparison report. It lets you compare the top vendors based on a range of business, technical and feature criteria.

With this guide for your transportation management system RFP, you’ll be well on your way to selecting the perfect solution and enabling your organization to become more efficient.

Your business will benefit, and those grocery store customers will thank you — even if they don’t know it.

What are your top challenges in picking a TMS solution? Let us know in the comments!

Zachary TotahHow to Create a Transportation Management System RFP

2 comments

Join the conversation
  • Kritika - March 17, 2019 reply

    Great Stuff! For any contemporary transportation and logistics company, it is imperative to be on top of the operations in order to stay ahead of the competition.

    Zachary Totah - March 19, 2019 reply

    Hi Kritika,

    Glad you enjoyed the article! And you’re right, staying on top of your operations is definitely part of a winning formula. Thanks for sharing your thoughts.

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