Software development is a venture that requires investment. Both your time and money are valuable assets that shouldn’t be wasted on processes that don’t serve your main goal. This includes the way you bid your software project. So should you submit a software development Request for Proposal (RFP) or Request for Quote (RFQ)? Or neither?
Discover the best process for choosing a software developer to complete your project with long-term success, user experience, and the goals of your organization in mind. Learn about the benefits of each and what you can do to be successful in choosing a software development partner who can both innovate and execute successfully.
A Request for Quote, or RFQ, is a document submitted to vendors in the procurement stage of a project once specific qualities and quantities are established. For an RFQ, it’s crucial you provide baseline information like a project overview and a detailed scope of requested features. Do not use a general RFQ template. Requests for quotes for software development quotes should contain more specific fields.
In order to provide vendors with a clear understanding of your initiative, include information like a Technology Stack (services/personnel needed), project scope, project goals, a thorough description of the end users and their needs, and more. The more in-depth your RFQ, the clearer and more accurate your quotes will be.
An accurate quote plays a huge role in meeting both deadlines and budget goals. The more information your team has regarding the software implementations you’re seeking assistance on, the closer you’ll be to aligning your estimates with the actual outcome.
An RFQ is beneficial for business leaders who know exactly what they need, when they need it, and roughly what they want it for. If your business can’t quite answer all those questions, consider submitting a Request for Proposal (RFP).
Although a software development Request for Proposal still requires detailed information, it provides potential bidders with baseline information while giving them more control over the project. An RFP is helpful when there are more factors you’re considering than just money or when you know the problem you want to solve for users but aren’t sure of what solution to build or how to build it.
If you’re unsure of exactly what services your software project will need, an RFP may be a better option. This kind of process can almost act as an advertisement for your company’s initiative, so it’s a great way to garner attention for your project.
Once an RFP is submitted, you can evaluate the submitted proposals to see how well they align with your end goal. While this process does lead to a wider variety of project plans and prices than what you may receive through an RFQ, it can be helpful for businesses that may be starting their software journey from scratch.
Originally, RFQ and RFP were utilized to broaden the potential pool of partners beyond the known network. It was thought that more suppliers, partners, and technologies would be accessible by opening up the bidding process to anyone. However, what began as a good idea in theory resulted in a system that does not reduce risk or increase success for software development. There are several reasons for this.
If you are a software startup founder with a great idea but not technological background, you may find it challenging or impossible to create an RFQ for your business since a nearly finalized plan is necessary. Even in established companies, it is difficult to obtain the details necessary to put out a thorough RFQ if no one on your team has a background in software development plus a thorough understanding of your users.
More detailed information in an RFQ also ensures more accurate responses leading to a clearer price comparison. But how can you ensure you have enough information for your vendors before you send a Request? When you start sending out RFQs or RFPs without setting specific parameters, it’s objectively harder to get accurate quotes.
When a software developer is met with an ambiguous RFQ or RFP, there are two ways they usually proceed with the proposal. They will either overestimate their cost of services to include any unanticipated changes or costs throughout your software implementation. Or, they will underestimate their costs and add the stipulation that services may need to be added throughout the project to ensure success; this almost always results in expensive change orders or reworks. Either way, you are given an inaccurate estimate.
Furthermore, failure to clarify project objectives and services, can extend project timelines. Furthermore, the RFQ and RFP processes are time-consuming, even though software needs to be responsive and quick. Missed deadlines for software development happen often but they are not something investors, boards, or the C-suite likes to see.
Lastly, the top software development companies don’t often respond to RFQ or RFP. The response process is time consuming and expensive. Furthermore, due to some companies unethically putting out a Request and then stealing the ideas from it, it is risky to submit a detailed response.
If you are clear on the numerous factors related to your proposed software project, including user needs/problem, organizational goals, the solution that will meet both, budget, timelines, and more, you are likely equipped to write a Request for Quote. The concern here is how vetted your idea is. You may know your user base intimately and be very aware of their needs and desires but not be as versed in the best way to align them with a software solution. Or you may be very technologically savvy and not experienced in software project management and thus unable to accurately estimate timelines.
There are so many aspects to a software project. It’s very challenging to create an RFQ that does not have blind spots. And these blind spots trickle down to the bids and through the project.
If you are less sure about the way to technologically solve your user’s problems or fuzzy on expected budget or timeline, etc, you may consider writing a software development Request for Proposal and letting the responses guide your expectations. The issue with that is that your lack of clarity trickles down and RFP responses will be more guess than plan.
If you are in the new idea stage, if you are launching a software startup, if you need to make a detailed business case for the development budget and timeline (or even to justify the need for the project), or if you’re in any other state from ambiguous to fairly organized, you can benefit from an Innovation Lab. Read more on that below.
We know startup founders and CIOs (or other leaders driving software development in large organizations) often think they have to start the project by putting out an RFQ or an RFP. However, they may not be equipped to write a thorough RFQ or even RFP – let alone choose a candidate from the bidders – and there is nothing surprising about this. As illustrated above, there are countless factors that go into ideation/discovery, solution validation, design, experimentation, and more. And all that happens before development even begins!
Whether you’re considering an RFQ or an RFP, clarity about the project scope is critical to get a successful launch and to create a Minimum Lovable Product. Here at ENO8, we’ve developed the Innovation Lab to ensure that your project comes to life the way you imagined – or better.
The Innovation Lab is a guided workshop with our expert team that helps develop your project inside and out. After only a few weeks, you’ll have clarified objectives and even an insightful prototype to help you gain accurate bids, choose the right vendor, and attract investors. When you have all the information you need upfront, you’re providing your stakeholders with a rock-solid plan that’ll launch you towards your end goal.
By reducing bidding time and clarifying your expectations, you’ll have an easier experience that will also provide you with clearer, more cost-effective estimates as well. If you’re impressed with your Innovation Lab experience, you can also choose ENO8 to build your software. Either way, the Innovation Lab does all the heavy lifting to ensure your software will hit the mark. ENO8 is also here to transform your developed plan into a successful software initiative. Let us take your technical projects to the next level today!
Jeff Francis is a veteran entrepreneur and co-founder of Dallas-based digital product studio ENO8. Jeff and his business partner, Rishi Khanna, created ENO8 to empower companies of all sizes to design, develop and deliver innovative, impactful digital products. With more than 18 years working with early-stage startups, Jeff has a passion for creating and growing new businesses from the ground up, and has honed a unique ability to assist companies with aligning their technology product initiatives with real business outcomes.
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