RFP for Software Development: How To Write an Effective Request For Proposal

Tapan Patel

Nov 06, 2020 | 8 min read

Request for Proposal for software development

With the pervasiveness of the internet, it is safe to say every company has to become a software company now. However, not every company has to build their own software. Outsourcing software development has become a norm not just because it saves costs but also because it lets you focus on your core business activities. However, the challenge is to find the right offshoring partner for your business. One way to do so is to ask for proposals from IT vendors that fit your criteria. Thus, the concept of Request For Proposal, or RFP for software development came into being.

What is an RFP for software development?

RFP for software development

An RFP (Request For Proposal) is the first document that you will need to create before you approach a software development company.

The RFP will contain critical details like the specific requirements for your project and the expected delivery date.

When you submit this document to IT vendors, they will submit their bids based on your RFP. The RFP acts as a base on which further discussions and negotiations are held between a client and a software development vendor.

Let’s have a look at the basic Request For Proposal (RFP) structure.

Software development Request For Proposal (RFP) template

An RFP for software development consists of the following sections:

1. Executive Summary of the project along with your company's description

2. Project scope and deliverables

  • Project Management
  • Infrastructure Requirements
  • Functional Design
  • Product Requirements
  • Development
  • QA
  • Product Management

3. Timeline for bid submission

4. Format for vendor bids

5. Selection criteria

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Components of Request For Proposal (RFP) For Software Development

Components of Request for proposal for software development

Now that you have an overview of the RFP template, let's dig deeper and analyze each component of the RFP.

1. Executive summary of the project and company overview

The first part that comes in an RFP for software development is the executive summary of the project and a little bit about your company.

Write the project's summary in a simple and easy to understand manner. Make sure you present the following highlights about your project:

  • Software project goals
  • Software requirements
  • Restrictions
  • Target audience

While enlisting your project goals, you should keep a few things in mind.

Firstly, you should focus on enlisting the goals and needs of your business and leave the technicals to the software developers.

Think about quantifying your goals. For instance, if you want to reduce the safety-related accidents in your company, then you should keep the goal of a 33% reduction in safety-related issues within one year.

Ensure that the metric that you select is easily trackable.

Secondly, the overview of your company should answer the following questions:

  • What’s the mission of your company and what are its values?
  • What is your software idea and how will it help your business achieve long-term goals?
  • Who are your target customers?
  • Are there any existing flaws in your current solution?
  • Which processes would you like to improve with the software?
  • Do you anticipate any potential roadblocks?

By including your company background, you will ensure that the vendors understand what your company wants and come up with solutions that align with your business goals and values.

2. Project scope and required deliverables

Project Scope Management

This is the second part of an RFP for software development and also the most critical one. This is because the vendors will do most of the cost calculations based on the details mentioned here.

2.1 Project management requirements

In this section, you will discuss how your project should be managed by the vendor.

It includes your requirements related to

  • Communication methods
  • Development platforms
  • Testing methods
  • Project management tools

Moreover, you should also iron out the details regarding the team structure. Specify whether you want to go for a dedicated team, remote project management, or a custom hybrid solution.

Also, don’t forget to ask whether the IT vendor will provide a dedicated project coordinator for your project.

In case you are going for agile methodologies, then ask which methodology the IT vendor will implement in your project. The options include scrum, kanban, lean, etc.

Emphasize on detailed project documentation as it will save you from future hurdles like team replacement and tech revamping.

2.2 Infrastructure requirements

You should always list down the infrastructure requirements that your project will need and gauge your vendors on the kind of infrastructure they have.

This is critical because many software vendors take up a project and are unable to finish it on time due to infrastructure constraints.

To have clarity on the IT vendor’s infrastructure facilities, ask the following questions:

  • What is the software and hardware infrastructure that your company has?
  • How will you protect intellectual property rights?
  • What about data security?

To avoid wasting your time talking to vendors with  inadequate facilities, you can include the following as a basic infrastructure requirement in your RFP for software development:

  • Regular infrastructure monitoring
  • Good quality anti-malware software installed
  • A robust data security system
  • A well-drafted NDA
  • Good security practices like keeping customers IP secure

By asking the right questions, you will save yourself from a lot of future hassle as non-competent vendors will be filtered out in the process.

2.3 Functional design for the required software

Functional requirements are those specific pieces of requirements that your software product must satisfy in order to be competent.

The functional requirements of your software project could either be

  • High level (general)
  • Low level (those which contain lots of details).

Here, you can also ask the IT vendor to let you know how each of your functional requirements will affect the UX of the software.

Understand that the functional requirements should only deal with your requirements and not detail the process which the vendor must follow to build them.

An example of a functional requirement can be:

The system should be able to capture data from the State as well as Central tax systems.

2.4 Product requirements

Defining product requirements is essential as it will have an overbearing effect on the final shape of your product.

While defining your product's requirements, try to answer the following questions:

  • How will the user experience be?
  • What would be my product's capabilities?
  • What tasks will be automated?
  • Which are the entity details that each product component must have?
  • Are there any processes that are non-compromisable?

Providing a user story is one of the best ways to communicate this information to the software vendor.

Ask whether your vendor would be able to provide the following specialists for your project:

  • Subject matter experts
  • UI/UX  designers
  • Technical specialists
  • Security experts
  • System analysts

If your current team already has any of the above-mentioned experts, then rope in their services while preparing the RFP for software development.

2.5 Software development and collaboration approaches

Here, you will ask IT vendors about the software development and delivery methods they follow. Additionally, you should also ask what project management tools they use and how you will be updated about each milestone.

Trello, Slack, and Jira are popular project management tools that standard software development companies use.

Make sure your team is comfortable with the project management tool that your vendor will be using. This will ensure a smooth workflow between your vendor’s team and your team.

2.6 Quality assurance

QA is a very critical function of the software delivery process and without a robust QA process, your vendor won't be able to deliver flawless software.

You should seek clarity on the following aspects with your software vendor upfront:

  • The testing approach and tools used by the vendor
  • How the vendor will adjust the testing process according to your project
  • The communication process between your team and the vendor's team

2.7 Product management

This section details the process of communication between your team's product managers and the vendor.

Ask for details about the communication schedule, mode of communication, and who will communicate for different project modules.

3. Timeline for a response to your RFP for software development

Timeline for RFP for software Development

In this section, you will set the deadlines for various RFP stages like:

  • RFP release date
  • Deadline for submitting and intention to bid by the vendors
  • Meetings with the vendors for any clarifications
  • Deadlines for submitting RFP responses
  • Final interviews
  • Selection deadlines

You should provide enough time to the software vendors for meeting all the above-mentioned deadlines satisfactorily.

By providing enough time, you stand a better chance of getting accurate quotations.

Notice that if your project is not that complex you could skip a few steps and shorten the process.

4. Format for vendor bids

To simplify the process of analyzing various bids, prepare a format in which all the vendors must submit their proposals.

The format should seek the following data from IT vendors:

  • Location of the software vendor
  • Name of the vendor and the projects previously completed by the vendor
  • The qualifications of various team members
  • A detailed cost breakdown
  • Post-development training and support plan
  • A vision for the final product
  • KPIs, analytics, and the process of development which the vendor wishes to follow
  • References, if any

You will make the job of the vendors easy by providing a ready to fill format. Try not to be too rigid with the format and allow the vendors to add a few details in supplementary documents.

5. Selection criteria

selection Criteria

Selection criteria for companies depend on their individual and industry preferences.

For example, for a nuclear power plant or a defence company, the past experience of the vendor is critical. On the other hand, for a startup, the cost is of prime importance.

Normally while selecting a vendor, you will likely go through two stages.

Pre-qualification stage

Here, you should conduct a preliminary elimination process to filter the vendors that are potentially able to handle this type of project.

Getting references and asking for similar types of projects are great ways to shorten your list of potential vendors.

The idea behind the pre-qualification stage is that you do not want to waste time sorting through hundreds of vendor RFQ replies.

Selection stage

The second stage is a more detailed one in which the company shares the details of the projects and asks for the following things from shortlisted vendors:

  • Cost of software development
  • The technical vision of the project
  • Deadlines
  • Intellectual property terms

While preparing an RFP, it is a good idea to let the vendors know about absolute no compromise terms. This will save both your time as well as the vendor's time and will avoid future problems for both of you.

For example, if you would not like to work with a vendor who is not ready to sign an NDA or does not have a robust data security protocol, then you should state that in clear terms.

The Bottom Line

There is no rigid template for writing an RFP for software development. However, we have tried to provide you with guidelines that will help you write an RFP that suits your requirements. While writing a Request For Proposal for software development, it helps to have members from all the relevant teams that can help you identify what exactly your project needs. If you don’t know what you need, the vendors will not know how to build your software.

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