A complete ERP RFP guide and template

Updated:

Your organization needs a new ERP. How do you go about finding the right solution?

Sending out an RFP (request for proposal) is a great way to get more information on potential vendors and narrow down your list of vendors into two or three you'd like to demo.

The quality of your RFP and the extensiveness of your requirements gathering process will naturally impact the quality of responses and can make the difference between a successful ERP selection and a wasted investment.

In this piece, we will delve into what makes a good RFP, what details you need to ask for and how to whittle down the options to the best fit for your organization. 

This guide will cover the following:

RFIs vs RFPs vs RFQs - what's the difference?

The RFP process is littered with three-letter acronyms. It's worth clarifying these before we start, to avoid confusion further down the line. 

Your procurement team (if your company is large enough to have one) will probably be very comfortable with the distinction between RFPs, RFIs, and RFQs, and it is well worth engaging a procurement resource earlier on in your ERP purchasing plans.

Still, if this is your first selection project, you might be unclear about what each one does and when to deploy them.

You can think of these three requests as a decision making funnel through which you can eliminate vendors that are not a good fit and get a shortlist of those that offer the best solutions and services for your organization:

RFI - Request for Information

An RFI can go to a large number of vendors and will give you broad information on their offerings, values, accreditations, and experience. When you receive these back, it gives you a good starting point and you can start to eliminate any that don’t feel like a good fit before proceeding to the next stage.

RFP - Request for Proposal

Now that you have your shortlist, it is time to probe deeper. The RFP is your detailed list of requirements, expectations and specific queries relating to your business pain-points. The best responses to your RFP will be those that demonstrate an excellent understanding of your needs with demonstrable experience in your ‘must-have’ requirements.

RFQ - Request for Quote

An RFI should be used to fill in the gaps in your information, while an RFQ is the document you send to shortlisted vendors asking for a detailed proposal with full costs, addressing issues such as technical specifications, deployment, payment terms, maintenance, and service level agreements.

 

Gathering your ERP requirements

Before you can embark on an ERP RFP, you first need to identify your requirements. This is fundamental to getting your RFP right, and ultimately to the success of the final implementation.

Start by compiling the business processes that you have in place today and then ask what changes need to happen. These changes should be both realistic and measurable. Define the pain-points of each business process that requires a change and outline the benefits that you would expect from those changes.

"Poorly executed requirements gathering can be devastating not only to the initial ERP investment costs but also to the operational efficiency of the organization post-implementation"

Wherever possible, those benefits should have a monetary value, although this is not always easy to achieve. Poorly executed requirements gathering can be devastating not only to the initial ERP investment costs but also to the operational efficiency of the organization post-implementation. 

Here's a requirements gathering process that will lay a concrete foundation for a good RFP:

1. Back to basics - what is your business strategy?

It can be easy to get lost in the melee of modules, features, and functions that different ERP systems can offer. Take a big step back and start by going back to your core business strategy. Remind yourself of your business objectives and build your needs from there.

Dig into what's holding your business back further. Issues you could consider here include:

  • Do you need to improve customer retention rates?
  • Could a CRM module help you achieve that and by what percentage?
  • Do you have supply chain risks that have been left unchecked?
  • What level of threat do those risks pose and how much could an improved SCM module save you?

By going back to basics and putting your strategy at the center of your requirement planning, you will gain much more focus on the ‘must-haves’ vs ‘nice-to-haves’.

2. Survey customer, supplier and staff requirements

Are you giving your suppliers the information they need in a timely manner? What about your customers? Is your finance team pulling their hair out at month end? Do other business units have multiple systems and offline spreadsheets to manage in order to pull reports or perform processes?

Canvas team members from around the business to identify internal pain-points and to learn which supplier and customer requirements you could be meeting more effectively.

Use our ERP requirements template to identify and prioritize your needs for new software

Again, put these requirements into ‘must-haves’ and ‘nice-to-haves’ with measurable goals so that success can be tracked and proven later.

3. Finalize and agree on requirements with all stakeholders

ERP might have started life as a manufacturing and financial operations tool, but your sales team, marketing team, and HR teams can also provide valuable insight. You may well have ERP users in every business unit - make sure you don’t miss an opportunity or a potential pitfall by excluding a key stakeholder.

This is also the time to get the requirements in priority order and, once again, look back to check business strategy alignment for each one.

 

Structuring your ERP RFP for the best response

Having documented your requirements, you are well on your way to getting an RFP underway. The vendors will also need a breakdown of your current software, hardware and internal implementation and maintenance support you have in-house.

Vendors also need to know your implementation timescale expectations, the reasons for the requirements you have outlined (what problems you expect to solve) and a (reasonable) deadline by which they need to respond.

Producing a document with a solid introduction to your business needs, operations, pain-points and ERP ambitions will help put your requirements into context. This might lead to unexpected solutions and benefits that you hadn’t thought of or included in your RFP template.

Let’s take a look at how to create the template part that forms the backbone of your RFP:

 

A customizable ERP RFP template

Using an ERP RFP template to create uniform proposal documents helps you meaningful side-by-side comparisons during evaluation.

Some vendors may have out-of-the-box solutions that make a great fit for a requirement while others may need to engineer a customization or deliver a bolt-on at extra cost. This template will help you quickly identify which vendors have the best solutions ready within the required schedule while also giving the vendors your own requirements, contacts, and timelines.

Section What to include
Background information Present a brief overview of your organization and its operations, number of users, satellite offices, expected growth and the objectives of the system users.
Project scope

Establish the specific duties to be performed by the provider and the expected outcomes. Include a detailed listing of responsibilities, particularly when subcontractors are involved.

Include a detailed project timeline from RFP send-out to go-live and a breakdown of your project budget. 

Requirements list

This is where you will provide a detailed list of ERP functional requirements and technical specs broken down by business unit, with space for vendors to explain how their system can meet each of them. You should also ask whether the solutions will be out of the box or customized.

You can put this into a tabular form if you want.

Vendor qualifications and references

Find out if the vendor has worked for similar clients with similar needs and ask for references. You can also check for accreditations and awards or other signifiers of a good fit for your ERP requirements. This is also a good opportunity to check how stable the vendor is and if they will make a good mid to long-term partner.

Budget and pricing Have each vendor give a cost breakdown for at least 3-6 years into the future. Costings should be given a validity period end date from receipt of the response.
Contractual terms and conditions Ask vendors for their standard Ts&Cs plus any that will be specific to this project.
Evaluation and award process Give vendors the details on how they will be assessed, the timelines involved and how the final selection will be made.
Contacts Include a list of all parties that they can contact regarding the RFP including internal resources and any third-party contractors and consultants.

For a more detailed ERP RFP template, check out our ERP RFP guide


Evaluating your RFP responses and considering further steps

Having a process in place for proposal evaluation is essential in ensuring that you select an ERP that meets your key requirements.

You may want to consider scoring each vendor against their ability to meet each of the requirements you outlined in your RFP, perhaps on a scale of one to five.

Here are the factors to consider whilst doing so, to avoid the process descending into chaos.

1. Rank vendors based on ability to meet key requirements

Go back to your key requirements. Any vendor that obviously cannot meet them can be discarded right away. Whilst scoring the remaining responses as outlined above won't give you a concrete 'winner', it will give you a good idea of the systems you should be looking at shortlisting. 

2. Compare support offerings

Which vendors can give you the ongoing support that you need? How do their SLAs compare and will you be paying extra for vendor support that you need in the future?

3. Arrange demos for the remaining contenders

Meet with each of the shortlist vendor reps to demo their product. This is a good time to discuss the system further. Request client references but also do your own research before you go to any meetings. Ask yourself:

  • Have they worked with similar clients or have the breadth of experience that proves flexibility and adaptability that your implementation requires? 
  • Do they have a healthy and stable enough business themselves in order to see your project through to completion?

Our guide to mastering ERP demos in five easy steps goes into more detail about the demo process 

You may need to meet more than once - or have a follow-up phone call - to drill down into every detail and ensure that your own key stakeholders are on the same page.

4. Ask vendors for concrete pricing information

Eventually, you will get to the stage where all questions have been answered, references checked, your expectations have been thoroughly laid out on the table and you have a good indication of which will give you the ERP solution that best fits your requirements. Now's the time to start asking for quotes and seeing what your budget will stretch to.

Creating the perfect ERP RFP takes time and patience, but the benefits are clear - and the money you could lose if you haven’t done your prep work can make this time-investment pale in comparison. A well thought out ERP RFP is crucial to a solid decision for your business. We hope these tools and steps help you to find the right ERP solution for you and avoid some of the pitfalls that buyers can find along the way.

author image
Helen Peatfield

About the author…

Helen Peatfield is a writer, editor and marketing consultant with a wealth of experience in ad tech, supply chain management and SaaS. When she is not typing away at her desk, she can be found scuba diving or wakeboarding in the sunny Gulf of Thailand.

author image
Helen Peatfield

Featured white papers

Related articles