How to write Request for Proposal (RFP) for Outsourcing Software Development?

Forbes Technology Council states that one of the most common reasons why most software projects don’t meet its happy ending is the lack of clarity. Hence, a businessperson must have clear software development documentation in order to receive a digital product (software, mobile app or website) that works exactly as per predefined scopes.

Request for Proposal (RFP) for software development is the list of requirements clearly outlined in an understandable way. Both the parties (the buyer and the service provider) work on it before the hiring of software developers take place.

What is a Request for Proposal document? – The definition of RFP

The request for proposal for software development is a formal document that outlines business objectives and clients’ expectations from the final software. The document is used to ask for proposals from various renowned software development companies that are shortlisted after research.

Post pandemic, most businesses are focused on integrating more technologies in one or the other ways to connect with their target audience. While some enterprises bank on off-the-shelf software tools that don’t require any external support from software development experts, the custom software surely require engaging different technology experts with different expertise. Hence, the trend of software development outsourcing projects to offshore IT companies will continue to rise, and it may be worth nearly USD 400 billion by 2025, according to Capital Counselor.

The Request for Proposal – General purpose

The general purpose of sending the RFP is to make sure that the service provider gets a clear idea about the vision and the scope of the project which will keep everybody on the track, the same track. Before the outsourcing software development project kicks off, it is important for all the concerned parties i.e., the business and software development company that they are on the same board. Hence, the three simple steps are followed.

Create an RFP document

Before even the thought of outsourcing a software development project to an offshore software development company is born, entrepreneurs should have four things in place:

• defining business objectives
• deciding on the period/timeframe
• fixing the budget
• outlining the technologies and tools requirements along with their specifications

The document of request for a proposal for software development is the first step toward getting a tech solution to all your concerns.

Send the written RFP document to selected service providers:

Understanding the core criteria on how to select the best software development companies to shortlist a few tech partners and choose the ideal ones. Now, the next phase is to share the RFP document you have written with the shortlisted top cost-effective software development outsourcing companies and wait for their response. You may get answers to all your questions in most cases; nevertheless, be ready to shoot an email again in case things are still not clear to you.

Find a good match

Once matters are clear and both the parties have agreed upon a common conclusion about the software development, you can hire remote developers from the software development service provider. You should mind that finalizing the software company means you have all RFP document matters clear.

The benefits of the RFP documentation

Accurately prepared RFP documents can help you get an extra edge over the software development life cycle to be initiated at your outsourcing technology partner. This document proves to be a foolproof way to get a customized software product that aligns perfectly with your business goals and meets your expectations.

Here are a few advantages of issuing an RFP document –

Saving time

Contacting different software development agencies differently with different questions consumes a lot of time, and you don’t have that. You are busy building strategies to streamline and probably expand the business’ products and services.

Leave everything on RFP documentation you have written as it creates a common platform with common questions and information that all the shortlisted software development solution providers shall read and reply to. It saves a huge chunk of time in preparing dozens of different documents separately for various software companies.

A litmus test of the service provider

Through RFP documents, you can understand software development firms’ abilities and approaches to your product. It shall also reflect how well the agency got your business objectives, and how sincere they are in to replying your initial proposal. Delayed or sluggish responses from outsourcing software development service providing company show that if you hire them, you are at risk of falling into a not-so-good business deal.

Clarity is the key

The documentation of request for a proposal assures you that all the matters required to initiate a customized software application development are clear and convincing. Moreover, it is the same document that is shared with multiple software development outsourcing agencies and, therefore, their replies may also be in the same format.

Ultimately, it becomes easy for the service buyers to compare and select the best software development outsourcing company and hire a dedicated software development team from them.

Getting the best cost to develop software

Since the comparison of various software development service providers is clearer through the RFP document you have created, it is time to crack the best deal at the best prices. The software development project documentation clearly gives you a hint about who is the best and most suitable for your project.

Nevertheless, the responses from selected companies shall also mention the best deal prices or costs to develop software as the documentation includes bidding on your project and a rough estimation. In other words, you can easily find competitive prices in the form of quotes. Slip into the best deal and look forward to receiving an optimum product.

In a nutshell, writing RFP documentation helps both software development firms and clients because it is a mutual document that stands clear in defining the project to be built.

• Sheds light on listing the software developers and selecting them
• Reveals the pros and cons of both the parties
• Helps negotiate on prices and settles down to a common quote
• Optimize time frame and budget with scopes with pluses and minuses
• Binds both the parties legally on deliverables and pricing

The differences between RFP, RFI, and RFQ

To many, especially new and young entrepreneurs, there lies a confusion between three requests – RFP (Request for Proposal), RFI (Request for Information), and RFQ (Request for Quotation). While the purpose of such documentation is clear (bringing transparency to set standards and define clear goals of the software product development), they are different in their definitions and purposes.

Here is the table that clarifies the differences –

Particulars	Request for Proposal	Request for Information	Request for Quotation
Definition	The document defines detailed information about your projects such as scopes, budget, objectives, selection criteria, and the like.	The document requests general information about the service providers’ abilities, portfolio, and potential to accomplish the project if allotted.	The document specifically focuses on predefined needs for price or budget evaluation and feasibilities.
Purpose	To provide clear instructions and get precise answers from software companies about their efficiency, tech stacks, and offers.	To survey and make a decision about whether the firm is fit for your project in terms of budget, capabilities, and deliverables.	Fix upon pricing and count the calculated risks of the budget increase.
Questions	The document questions software development service providers about their services, products, case studies, and business experience (in a particular domain) as well as team/strength.	The document asks about the market and domain questions. It includes intense research of peers at times.	The document questions everything about budget, milestones, and payment mode.
Time to use	When the project goal is clarified and deliverables are almost clear but you still need to fix upon the company and be open to suggestions. Also, when ideas are complex and the project is big that requires expert input.	When the market research is going on and you have less clue about what to include. You need to rope in domain experts from software companies to help you build the best-customized solutions. RFI can be followed by RFP/RFQ.	When you have confirmed the software development company’s efficiency and want to finalize the project.

Who writes Request for Proposal documents?

As said earlier, creating Request for Proposal documentation is the pillar of the software development life cycle procedure because before the project kicks off, it is the same document that helps everyone involved in the project understand the purpose. Depending on how you write RFP matters, the documentations and software development methodologies change.

Whether you outsource your project to any remote software development company to build a product, you need intense market research, planning, and a guide to sending proposals to various service providers. You can either hire experts from the market or can write Request for Proposal documents on your own; nevertheless, you should avoid writing it by yourself if you are not experienced.

RFP documentation requires expertise that only proposal writers possess. On the buyer’s side, they may hire proposal writers from a particular domain. The writers shall use the format to fill in the text and questions. Writing Request for Proposals often follows a standard format or structure of information that is just to be filled along with inputs from the business owners and strategic partners.

On the other hand, the software development companies providing outsourcing services reply to the proposal with utmost care. Business and technology consultants, along with a profound writer with good experience in replying to RFP completes the form. All the concerned executives, developers, and managers check the documents before sending it to the client.

To grab an outsourcing project, it is a golden opportunity for proficient software development agencies to fill in the details of their ideas and provide a comprehensive documentation as a response that impresses the buyers. It may include showcasing their best projects in their portfolio, the best technology stacks for software development, their efficiencies, and most importantly competitive prices.

The RFP Process: How to write an effective request for a proposal?

The writer should include the following factors in order to produce a foolproof RFP

 

Briefing company and exclusive project summary

The process of writing RFP documentation for software development begins with drafting an executive summary of the project and outlining the company’s vision and mission. Both the portions should be written in an unambiguous way; ask the writer to assure you that they highlight the following points in the document –

1. Objectives of software product
2. Software requirements
3. Software limitations
4. Target users

When you enlist the goals, you should focus on mentioning the business objectives leaving the technical part to tech gurus. For instance, if your target is to increase sales, you should keep the target of a 15-20% increase in a year; keep it feasible and not fancy. In the document, you should mention that the progress should be traceable at the end of the year.

As far as the company briefing is concerned, ask yourself these questions –

• What’s your company’s mission and vision?
• What do you expect from the software; how would you link it with your goal?
• Who is going to use the software?
• Is there any impediment in the current system you use?
• How the new software product will typically address the flaws of the current processes?

Project scope

The second part of the software development RFP document writing is defining the project scope, and it is a crucial stage. This is the phase where software service providers shall evaluate the entire project development cycle and count the resources, and necessary tools, and quote you accordingly.

Project management methodology

Software development outsourcing service providers effectively manage the software project, but it involves your needs in regards to –

1. Communications
2. Software development tools
3. Software testing tools
4. Software project management tools

You should also carry out the needs of hiring developers with different models. For instance, for big projects with more complexities better go with hire dedicated developers’ model; ask your IT partner whether they provide you with a project manager or coordinator for a dedicated software development team, because they would be your one-stop contact till the entire software project development process is satisfactorily over. If the agency opts for the agile method, ask which options such as Scrum, Lean, Kanban, etc. are available.

Learn to Effectively Manage your Software Development Team

Infrastructure

There are many software development myths, but instead, it is better to focus on the fact that the latest tool can build the best software being one. Any infrastructure would matter a lot to build a quality product.

Based on your research of the competitors and your business consultants and experts try to list down which technologies and tools you require to build a decent digital product that is needed for your business. Going for fancy products with high complexity levels may go in vain if your business operations don’t require it. Ask the following questions to your software development outsourcing service provider –

1. What sort of hardware and software tools do you have? Are they licensed?
2. How do you deal with intellectual property rights?
3. How do you assure data security and storage?
4. Would there be any compatibility problem with the product you develop?
5. Which technology or tech stack will the company use to build your product?

Functional requirements

Functional requirements are the backbone of any software project. You should draft the requirements at a high level and low level where the former shall have general ideas and the latter one would have more details.

The software development experts can put a bee in your bonnet about how each of these functions shall affect the ultimate user experience. For instance, you may ask your software project development specialist to have the product that fetches data from various tax departments.

Product requirements

Jotting down the software product requirements ensures that the final product built shall be aligned with your business goals. Ask yourself these questions –

1. How would your product address the UX?
2. What are the efficacies and limitations of the product?
3. What operations and processes will be automated?
4. Is there any process that shall remain unaffected by the automation?

Request for Proposal (RFP) template for a software product should mention everything clearly; you can ask for the experts’ help from various departments such as UI/UX, system analysis, security experts, and domain veterans.

QA and project management

Quality assurance is a result of perfect project management. The entire software development life cycle goes through various phases, processes and milestones. If documentation in software development is in place, things go smoothly.

Check for the following documents that you should be dealing with for a hassle-free business deal with an offshore software development outsourcing partner –

1. NDA (Non-Disclosure Agreement): the legal document between two or more parties about not sharing crucial data with anyone.
2. MSA (Master Service Agreement): the document that outlines maximum possible terms and accelerates the agreement process for now and future.
3. SoW (Statement of Work): this document defines product specifications and services to be delivered by the agency.
4. SLA (Service-Level Agreement): the SLA document assigns metrics to measure the progress and finally assures you of the product you expected.

Timeline

Timeline is the section where the deadlines of all milestones are mutually agreed upon and set. RFP software development stages are well defined and noted down only to check regularly and ensure that everybody’s on the track and not digress from the objectives. Some of the stages include –

1. RFP release date
2. Deadline to submit the bid
3. Appointments with firm to clarify the project
4. Deadline to submit RFP for software development
5. Final talks and interviews
6. Workforce selection deadline

Software development company bids

To carry out software development outsourcing company selection quickly, you should adapt a format for vendor bids. In other words, following a format and asking all the possible offshore software development companies to submit their proposals in the same format saves a lot of time. It’ll be easy for you to compare the costs to develop software solutions and also mark other criteria. Here is the general format –

1. Name and location of software development service providers
2. The main domain of the software firm
3. The strength of the company in terms of tech experts
4. Qualification and experience of software developers
5. Detailed cost breakdown along with milestones
6. A vision to develop customized product
7. KPIs, analytics, and other processes companies follow
8. References and portfolio
9. Post sales support and maintenance

Selection criteria

The company selection criteria are all that matters for the software development of your choice. Various factors affect the selection –

• Pre-qualification: you should adapt the elimination process to filter out the odd ones out. Consider references and other experience criteria in the first place so as to have only those with relevant experience in your domain. Sincere companies shall reply to RFQ quickly.
• Selection: depending on the overall cost, technical expertise, clarity in milestones, and finally intellectual property rights may help you decide on a perfect offshore software development partner for your project.

The final words

There is no one-size-fits-all solution to RFP documents for software development. All industries benefit from software development only when the documentation is rightly carried out because not only does it bind both the parties with their responsibilities but also helps keep the business deal smooth and flowing.