Software is playing a bigger role in business every year. The annual increase in spending in this direction worldwide makes it explicit. As per Statista, in 2021, IT spending on enterprise software is expected to amount to around 599 billion U.S. dollars worldwide, which is 70 billion U.S. dollars more than last year. At the same time, this will be a record growth rate compared to previous years. Moreover, according to the forecast, this trend will continue in 2022.
Such data indicate an increase in demand for IT services, which leads to an increase in the number of IT companies and professionals in this field. According to Statista, the global developer population is expected to reach 28.7 million people by 2024, an increase of 4.8 million from the number seen in 2019.
In turn, many companies in need of software development have more choices in the market. For example, you are the owner, co-owner, or representative of a company and have such a need. Where do you need to start? To get started, you need to create a list of potential IT companies that can take on your project. You can find them on recommendations or among those with whom you have worked before.
Next, you should prepare a request for proposal software development (RFP), which we will discuss in more detail below in the article. Here you will specify all the key parameters of your project. You will then need to send this document to selected vendors who will review it. If an IT company can take on your project, its representatives will send you a software development proposal. There may be several such companies, so you may have to choose the best option. Then you start working with an IT company that can develop your software.
Request for Proposal (RFP) is a document of the buyer with detailed information of the project to receive proposals from software development firms. It describes the needs, goals, requirements, and budget of the future project to select subsequently the ideal supplier who can implement it. Each candidate in a software project proposal indicates how they would cope with your project, covering everything from the necessary resources to costs.
A software development company gets your RFP and analyzes all its components, after which it decides whether it can undertake your project, evaluating its experience, team, and other resources. If the IT company can implement your plan, its representatives will prepare a software development proposal with a detailed description of the items you included in the RFP.
We will talk about this later in a separate section, but it is worth emphasizing also here. The request for proposal for software needs to include information to IT companies on how you will process their offers and the time frame of each stage when selecting the ideal vendor. This will help software development companies understand how much time they have to prepare proposals and when to wait for your response.
There may be a situation where you will receive offers from several candidates for your RFP. Be sure to write back to those IT companies that you decide not to work on your project with. Why? To add them to your database of potential providers for your future tasks and to establish a friendly business relationship. And also because the lack of any response to the IT company's offer can be perceived as an insult or disrespect.
The structure of an RFP may vary depending on the project, but it should still have key elements. This will assist software development companies in understanding whether they can take on your project. Based on our experience, we prepare an RFP template for software development, and we believe that this document should consist of two parts:
Typically, companies use a simple RFP format for software projects in Adobe Acrobat Reader. Here is a sample RFP for software development that can be found online. There are other similar examples, but such documents look unreadable and oversaturated, and visually it is better to submit your request in the presentation. Yes, this is another proposal format for software firms that can be made in Google Slides. Then you can perfectly break the request for proposal for software, each item will be on a separate slide, which will greatly improve the level of perception of your request. This will help you stand out from other companies that send their RFPs to vendors.
The clearer you present to the RFP, the more likely you will receive an offer from a firm that will carry out your project successfully. You should specify the document structure at the beginning of the RFP. This will allow candidates to run quickly on the main elements. It will also not be superfluous to add the title of your project at the beginning (for example, a web application development or something other).
You need to build your RFP so that the proposal format for the software company is clear. Then all the offers from IT companies can be easily compared with each other and choose the best option.
Below we have prepared a software RFP template, which you can start from when preparing this document. Based on your project, you can change the order of items, add new ones, and delete existing ones.
You should first provide your potential software development companies with data on who they will be dealing with. And you need to add information of the employee who will be the liaison between your firm and a vendor. For example, it could be you, the CEO, a team leader, a project manager, or someone else, depending on your vision. This person will be responsible for processing requests and suggestions from IT companies. In addition, your representative will discuss all suggestions with other team members and then prepare responses to them.
You can add the following important data in RFP for software development about your person:
Check these items carefully several times for mistakes.
In case of unpredictable events, you can add the contact details of another of your colleagues, who the IT company can contact. For example, when receiving proposals, your first representative may be on a business trip, on vacation, or on sick leave. Then such a backup option would be appropriate.
You can still set up an autoresponder in your mail if the IT company writes to your representative during non-business hours. In this message, you can indicate that you are happy to receive a letter from this company and that you will be in touch shortly.
Second, you need to provide information to your vendors about a brief description of your company. It will help them to understand the specifics of your work and most importantly the project.
We suggest you add the following items to the software development request for proposal:
You may have a short presentation or video about your company that reflects the essence of this RFP item. Then you can insert a link to this file here. And it will be your perfect business card for new business partners.
In this section, you should indicate the key steps and their dates when searching for and deciding to work with a software development company. This will help your candidates better understand how much time they have to prepare their proposals. And for you, this is a convenient way to control every step at this stage of your project.
You can add the following events with dates to RFP:
Also, in this section, you can specify the format in which you would like to receive a proposal from the candidates. At the stage of analysis of proposals, this will greatly simplify your decision-making.
Now you need to highlight some of the most important details of your project so that your candidates understand what you exactly need. In this section, you should describe the issues you want to resolve after developing the software. Ideally, each problem should be described in detail, not shown in the abstract.
This element in RFP is the most important because it includes the following components:
Therefore, it is worth spending enough time and effort to indicate the necessary information fully. This will allow you to understand your product first and only then for candidates.
In this RFP preparation phase, you outline the software development steps that help your potential vendors understand whether they can meet such requirements. Below is a table listing the components that can be in each step:
You can indicate under the table that you understand that each company has its work specifics, so ask them to adjust this table if necessary. It’s just the software request for proposal template, so you can safely make changes to the first row of the table.
In this section, you have to provide a lot of technical information. Regarding your intended product, you need to specify the following technological requirements:
You can also specify your current digital environment here, as your new software will be integrated there. That's why your vendors need to understand the details of your:
The project budget is usually a key factor that IT companies pay attention to when considering RFPs. Therefore, it is important to indicate not just the amount, but to indicate the price range and detail the budget. Alternatively, details can be added to the table in “Scope of work and deliverables” for each step.
Additionally, you can indicate that you are ready to review the project's cost if only the price raises questions from the candidate. So such vendors will also send you their suggestions. At the same time, the IT company can help you eliminate elements from the project, without which it can do in the early stages of work.
And here we come to the last section of the RFP document for software development. Here you need to specify the criteria for evaluating the candidates' proposals. This will help your potential providers present themselves on the side that is decisive for you. Below is a list of approximate criteria:
This set of items in the software RFP template gives you an idea of what the structure of this document should consist of so that IT companies can understand whether they can send you their proposals.
Above, we have shown the key elements of RFP, which are enough for IT companies to form their proposals. However, you can dive even deeper into the selection of the optimal candidate. To do this, you need to prepare an Appendix for your RFP, which will help you learn even more information about software development firms and teams. Then your choice of partner will be extremely accurate and successful.
We have prepared approximate elements with questions that can be added to the Appendix. You can use them and add others.
So, you know everything about a request for proposals and an appendix. You know what items should be there, and you know how to present information in the best way. Therefore, we hope that we have managed to help you understand this issue.
If you are now looking for an IT company for your new project, then our highly qualified employees at DataxDev are ready to develop the software for your business. And we are also ready for your request for proposals.
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