Requirement definition and RFP document production

This fifth blog in the series of nine blogs on the sourcing lifecycle highlights the requirements that should be defined in the RFP document to receive the best responses from suppliers and ultimately successful contracts.

The objective of the Request for Proposal (RFP) process is to evaluate potential suppliers and enable a down-select decision to be made. As a general (and simple) rule, the more proactive and prescriptive the end-user organisation can be in articulating their requirements and objectives, the better the contract that will result. The customer should be clear as to what is required from a managed service or outsource contract, but should stop short of describing how it should be delivered. The ‘what’ is the realm of the customer, but the ‘how’ is the realm of the supplier.

Requirements should be defined across the following areas in the RFP document:

• Service demarcation and service scope
• Technical architecture, vision and strategic objectives
• Service delivery model, service management processes
• Service level agreement
• Governance model and forums
• Commercial objectives, cost treatment and allocation, pricing model, asset treatment
• Legal terms
• Employee transfer
• Risk and compliance

The RFP document and the supporting documentation should be issued as a single pack to all suppliers simultaneously. When issued with the RFP document, the suppliers should receive clear instructions as to the expectations upon them, including timeline for responses and key contact details.

It is important to allow the suppliers sufficient time to respond to the RFP document and to understand the requirements and due diligence information contained in the RFP.