What is an RFP?
A Request for Proposal or RFP is a document that details a project your business is aiming to complete that acts as an invitation aimed at soliciting proposals from vendors based on your specific criteria. It is a formal way to gather information from vendors on the methods and their capabilities to complete your proposed project.
The goal of an RFP is to gauge and identify the best-qualified vendor to solve a business problem.
Why Are RFPs Important in Payroll & What Makes Good One?
Companies that are rapidly expanding into different locations will often look to payroll vendors to upgrade and streamline their payroll models. Some payroll vendors are able to centralise your data from different locations to one system. This creates a single source of truth which increases reporting accuracy and efficiency.
However, with so many payroll vendors on the market for businesses to choose from, selecting the right one for your payroll project is the difficult part. For example, not all payroll vendors can offer 100% in-country support or meet a company’s need for regional/global payroll. An RFP will help you find the most suitable payroll vendor for your organisation and reduce the risk of incompatible partnerships. Through the response of the vendor to your RFP, you will be able to assess whether they can tailor their service to meet your business’ payroll demands.
A good RFP is one that clearly outlines the problem and how you aim to solve the issue. It outlines a clear application process, evaluation criteria, and a complete set of questions to help find the most suitable vendor to meet your needs.
Want to find the best payroll vendor for your business? Download our RFP template now to create the perfect payroll RFP!
What Should I Include in a Payroll RFP?
Overview of the Project
The first step of an RFP should be a background introduction to the project and why you need the project to be completed. This gives vendors a quick idea of whether their expertise and services can meet your demands. It also allows vendors to include all the information they deem relevant for the project.
Provide a brief background about your company but only include important information like core values, office locations, number of employees, number of legal entities and expected services, etc.
Key Objectives and Current Process and Systems
State the key objective and expectations you expect to see after accomplishing the project. As part of this, it’s also important to provide an overview of your current systems and processes so that the payroll services company can provide a scalable solution that leverages and integrates with your existing HR or HCM systems, time attendance software, and financial and business intelligence/reporting systems where possible.
Set out the timeline you expect the project to be completed and give an estimated go-live date. This will give your vendors an opportunity to let you know whether they can achieve your expectations.
Problems You’ve Faced
Building mutual trust between your organisation and your potential vendor is crucial for a strong strategic partnership. Be honest with the problems you’ve faced or any potential issues that could cause problems during the project.
Make sure to ask vendors about the costs involved with completing the project to ensure there are no unexpected charges and add-ons. However, it is important to keep a budget in mind or give a range if required.
Questions and Minimum Requirements
Outline a set of questions you will need the vendor to answer in regards to the project. This could be a large selection of questions which may include the company’s background, the service/product, security, implementation, compliance, etc.
Note Your Selection Criteria
If possible, provide your vendors with a structure on how you want them to respond, this may include:
- Vendor Background Information
- Proposal Summary – How They Can Meet Your Needs
- Costs/Pricing Breakdown
- Existing or Previous Client Examples & Testimonials
Give a brief description of your winning selection criteria. This will help each vendor craft the response to meet your needs. Depending on the answers you receive from the vendors, you should shortlist the potential vendors which best meet your requirements to organise a face-to-face meeting with their team of representatives.
This is the perfect opportunity to clear up any further questions and issues you may have. This will give you the final answers on who to select as your partner. When you have selected your preferred vendor, review the costs and areas of improvement negotiate with them.
The Best Practices of Creating an RFP
A poorly executed RFP will cost you and the vendor valuable time. It is essential to include all relevant information and ask the right questions that will help you determine whether a vendor can actually deliver to your needs. An incomplete RFP can leave you with many questions and risk pairing you with an unsuitable vendor unable to deliver. Creating the right RFP requires strategic thinking and a lot of planning to ensure the most important information is all included.
It is crucial to keep the RFP easy to read and the layout clear. For example, structuring questions into sections ensures all aspects are covered, while asking open-ended questions is a great way to make the vendors think and tailor the response to accomplish your project demands.
Download Our Payroll RFP Template!
Struggling with how the start your RFP? Download our payroll RFP template to help guide you to creating the perfect payroll RFP! Our template covers a range of important questions you should ask vendors, click here to download the template now.
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