How to analyze rfp responses?

This post should help those who are assessing a RFP response to a requirement for an IT solution in any domain. The post is suitable for both product and services RFP. Towards the end, I have also provided a short note on how Government RFP’s are analyzed.

Analyzing a RFP response is a complex task as it involves functional assessment, technical assessment and commercial assessment. Even before releasing a RFP for any IT solution, it is important to map the functional requirements in details so that companies responding to the RFP can clearly state whether their solution supports these functions. If it is a product company, then the fulfillment can be either as ‘Readily Available’, ‘Achieved by configuration’, ‘Achieved by customization’ or ‘Not available’ at all. These inputs can be filtered and an assessment can be done for the 4 parameters. This will give a clear idea on the functionality coverage. If there are any points that the accessor is not clear then the same can be queried back to the company that is providing the solution. This is followed by a demo of the solution wherein some specific use cases are shown by the solution provider. 

Incase of a grounds-up development project, the functionality mapping can be done by explaining how the functionality will be supported. If any functionality is not available then the same can be developed and effort costs will be applied. The overall functionality coverage and the cost thereof will help the analyst to derive the overall value of the solution to the company over a period of atleast 5 years or more.

The next stage of assessment after the functional mapping is the technical analysis. Since companies are moving their IT infrastructure to the cloud, the licensing model of selling software products is slowly becoming passé as companies are cutting down on costs. It was only a couple of days back when I was assessing a RFP response from 3 different companies that we found a difference of atleast 50% between the company that is providing a license model with inhouse servers and the one which is providing a user based subscription revenue with functionality options with the solution hosted on the solution providers servers. However, there is a BIG factor that needs to be analyzed.

If you are a large company, the functionality required will be complex. Therefore, cost should not be the key determinant when you are analyzing a solution. The requirements of large companies may not fit into a cloud solution where there is a limited scope of configuration and customization. Such companies may need to customize the solution to fit their specific requirements. In such a scenario, licensed solutions with inhouse deployment still looks a better option than subscription models. Larger companies may also have more rigid guidelines related to their IT infrastructure and security which are difficult to fulfill in a cloud model.  If it is a grounds-up development, the service provider may use some existing libraries that can help to quickly make the solution ready. Large companies can also look at this option.

The commercial aspects of the solution is clearly a very important factor while analyzing the solution. Generally cloud providers offer the core components at a fixed monthly subscription and you can opt for additional features that are added to the monthly subscription. Apart from the subscription cost, there is a initial cost for configuration, deployment and integration. All these added up should give you an idea of the overall costs for the next 5 years.

For a licensing model, the cost components are the license cost, implementation costs and costs related to customization and interfaces. It is noticed that in case of large companies following the licensing model, the cost of the solution increases by almost 40-50%.

The tech stack required for deployment of an inhouse solution will depend on the processing requirements of the solution that includes data volumes (database), app server requirements, OS requirements etc. Generally, it would be a 6 core CPU with RAM and disk space to match requirements. However, if you deploy a subscription based cloud solution there is no requirement of any inhouse server. The system can be accessed on the end-user system.

The final assessment needs to be a very detailed one considering all the factors mentioned above. It should give a clear snapshot to the decision maker on which solution should best fit the requirements of the organization.

If you have been doing federal government proposal writing services, the assessment is done primarily on rates, experience, company financials, fulfillment strategies, marketing strategies (in case if it is a Master Services Contract), support for small and disadvantaged businesses etc. It varies from one RFP to another but broadly these are the parameters on which they assess the response. Similarly every RFP in every sector is analyzed as per given set of parameters. When writing the RFP response the writer should understand key aspects such as the documents that need to be provided, the key winning factors (many RFP’s provide the percentage that they will assign to each factor when judging the RFP).