Selecting an ERP System: Create an RFP
By: Katie Foley
What exactly is a RFP? A RFP is an acronym for "request for proposal". In the software industry, a RFP is a document that prospective customers send out to ERP vendors they are considering to elicit bids for an ERP solution. A RFP can help guide the direction of the on-site demonstrations, as well as keep the various ERP vendors organized for the decision makers involved. However, RFPs are used in many industries- from finance to event planning and many industries in between.
So, how do we create a RFP for selecting an ERP system for a manufacturing company?
Project Objectives
One of the first things a RFP should address is “what is the goal of implementing a new ERP system?” This section might include objectives such as: to replace a legacy system that we’ve outgrown, to streamline business operations, to provide an “all-in-one” solution to run all aspects of business, to offer enhanced reporting, to eliminate the use of homegrown systems and spreadsheets, to reduce errors from manual data entry. Here the company may also describe its timeline for the project from when completed RFPs are due to when the decision will be made to when the contract will be executed to the ideal go-live date.
Company Overview
Next, the prospective company should provide the ERP vendor with a sense of who they are. What products do they manufacture? How long have they been in business? What do they value as a company? Where do they see themselves going in the coming years? This might be another place to share the motivations for starting this ERP project.
Current Environment
In deciding what direction to move forward in, it’s important to share where the prospective company is coming from in terms of a business system. What sort of system does the prospective customer currently use?
This section may include what ERP system the prospective customer is currently running, what processes they perform in other systems or manual spreadsheets, and what hardware they have in place. This section should include the current (and expected) operational volume – how many users, number of GL accounts, POs/year, invoices/year, number of employees, number of active clients, etc.
ERP Requirements
Probably the most important section of the RFP is where the prospective customer lays out the ERP requirements in great detail for the ERP vendor to address. It takes the high-level objectives laid out earlier in the RFP and breaks it down into detailed ERP requirements module by module – from general ledger and accounts payable to project management and labor tracking and many, many more modules in between.
Also included here would be the need for document management, automated workflows, information sharing, and reports. Lastly, the prospective customer should describe their security requirements, hardware requirements, and data conversion requirements.
Proposal Format
Here the prospective customer lays out exactly what they expect from the ERP vendor in a proposal. Common items you might expect to see in the proposal formal include a synopsis of the overall proposal, the ERP company’s background, customer references, proposed solution, implementation plan, other requirements (support, new releases/upgrades, user conferences, necessary hardware, etc.), detailed pricing, and a copy of software licensing and maintenance agreements.
After the RFP is submitted to the ERP vendor, it’s up to the ERP vendor to fill it out to the prospective customer’s specifications and deliver it back to prospective customer according to the timeline described in the RFP. An RFP requires great detail and thought before it is submitted to the ERP vendors, however when an RFP is well-prepared it will likely lead to a finding the right fit in an ERP solution and therefore a smoother ERP implementation.
To learn more about Visibility’s ERP solution, please get in touch with us. Contact us online or call us at 978-269-6500
