Writing a Request for Proposal (RFP) or Request for Quotation (RFQ)

You are convinced that outsourcing to India can help you to experience massive savings in terms cost, time and speed to market. India, the world's outsourcing capital can give you access to skilled professionals for almost any service /product that you wish to outsource. Based on your decision to outsource to India, you have analyzed your business requirements, conducted an intensive vendor selection process in India and finalized on a list of prospective vendors. Now all you need to do is select the most suitable Indian vendor for your business.

For that, you need to draft a Request for Proposal (RFP) or Request for Quotation (RFQ). You can review the answers sent by prospective vendors and finalize on the most suited vendor for your business. A request for proposal or request for quotation is integral in choosing the best vendor with the most advantages for your company. Contrary to popular belief, writing a RFP or an RFQ can be easy if you know the functions and objectives of the document.

The difference between a RFP and an RFQ

A request for proposal, also known as RFP or RFQ is a document that is issued by a company when it wishes to outsource a service / product to India. Several prospective vendors will then bid on the work, thereby providing you with the most competitive price.

Request for Proposal: An RFP is a document that is written to the vendor for complex services / products where the service, quality or the final output will be different from each vendor that is answering the RFP.

Request for Quotation: An RFQ is a document that is written to the vendor for simple services / products / commodities that are straightforward and where there is no differentiation between the responding service providers. In an RFQ the negotiation points can be packaging options, delivery schedules etc.

What you need to know before drafting an RFP or an RFQ

• Before you get down to writing an RFP or an RFQ, figure out what you want, what you need and what is possible from the outsourcing relationship
• Make a clear distinction between the things that you specifically need and the things that you want in the RFP or RFQ. Identify needs and requirements in an RFP with words like "will", "shall" or "must". Identify wants with words like "optional", "can" and "may"
• Decide if you are looking for a vendor with the fastest delivery, the lowest cost, or a combination
• Organize your RFP or RFQ with sections, subsections, introduction, requirements, selection criteria, timelines, optional items and the process
• Decide if you are planning to mail the RFPs or post them on your company website

Objectives of a RFP or RFQ

• To get detailed proposals from each vendor and then to evaluate these vendor responses to see if all the objectives of your company are met
• To understand the nature of the vendor and to get the best possible outsourcing deal
• To ensure that all the interests of the stakeholders of your company are met and a consensus is decided on
• To place your company in control of the vendor selection process by making your company define the vendor selection rules
• To build an outsourcing partnership between you and your vendor right from the beginning

What should be included in a RFP or RFQ?

When you draft an RFP or an RFQ, do include the following sections. However, your RFP will be based on your type of company and the product / service for which you require a vendor. Remember to customize your request for proposal according to your individual needs. Here is a list of the sections that need to be included:

1. Specific submission details: Submission details such as the contact person for queries, deadlines and the mailing address of your company
2. Company introduction and executive summary: An introduction and executive summary to provide prospective vendors with your service / product requirements and an overview of your company
3. Background and overview of your business: An overview of your business, products and the market sector that you cater to. This will help prospective vendors understand your business needs better. Be sure to also include important background information about your company
4. Specifications in detail: Your RFP should contain detailed specifications about your qualitative requirements and measures. If you are sending an RFQ, then it must contain the quantitative measures that you require. Timelines, software / hardware requirements, business / technical requirements, service levels and milestones are all examples of specifications that you can include in an RFP or RFQ
5. Constraints and assumptions: Mention in the RFP or RFQ any assumptions or constraints that you may have about modification costs, licensing rights or travel expenses
6. Terms and conditions: Include all the terms and conditions of the contract so that the prospective vendor can provide a clear response about service levels, contract length, warrantees, renewal options, delivery penalties, financing options etc
7. Your selection criteria: The last section in your request for proposal or request for quotation should be an overview of the selection criteria that you will be using to select a vendor. Sharing this information with prospective vendors can help them to understand the main focus of your company

Once you have drafted your RFP or RFQ, you can send two copies each to the prospective vendors that you have selected from the vendor selection process. Include your contact information to make it easy for vendors to contact you.

Outsourcing to India is the best decision you can make for your business. Make a decision to outsource today. Get in touch with Outsource2india.