A complete ERP RFP template & guide (includes free template)

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

Sending out an ERP 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.

Given that 60% of ERP projects are categorized as a failure, it's important to get the stages of finding the right ERP right from the start. That's where your ERP RFP comes in.

The quality of your request for proposal 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 ERP RFP, what details you need to ask for, provide a sample ERP template, and how to whittle down the options to the best fit for your organization. 

You'll learn all you need to know about ERP RFPs including:

• The difference between RFPs, RFIs, and RFQs
• Gathering your ERP requirements
• Structuring your ERP RFP for the best response
• A customizable ERP RFP template
• Evaluating your RFP responses and considering further steps 

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

Your future ERP 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 ERP 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 ERP 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.

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.