How to Write a Request Proposal (RFP) for Software Development in 2024

Each year, CIOs or businesses looking to expand their software projects spend thousands of dollars on professional IT services. This expenditure often includes preparing and responding to an RFP for software development as companies seek to bring in external experts to achieve their business goals. While some rely on in-house teams, others still need to bring in external experts to achieve their business goals. This need has led to the huge popularity of IT outsourcing: according to Grand View Research, the global market will reach $1921.33 billion by 2030.

Indeed, IT outsourcing can provide the desired success if the contractor is chosen well. That is where a detailed (Request for Proposals) RFP for software development can offer you both tactical and strategic value. Done correctly, a compelling software RFP attracts quality vendors and minimizes the pitfalls, so you get products that bring tangible results to your organization.

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Do you want to write an RFP for software development professionally but need more clarification? Relevant experts will guide you through every step in the RFP process by leveraging our nine-year experience in product development.

What is an RFP for Software Development?

The RFP is a primary document that outlines the details of a project and solicits proposals and ideas from vendors. In the IT industry, it is used when a company needs to outsource a project that is beyond its internal capabilities but is crucial for the success of its business.

A clear-cut request for a proposal provides many benefits for the IT project and the company that is interested in it. The rightly prepared document offers the following:

• Strict fulfillment of all requirements of the software project
• Transparency and objectivity of the software development process
• Reducing the risks associated with supplier selection and product creation process
• Chance to find the right software development company for the project
• Saved time and budget during the project implementation

Finally, a good and beneficial RFP software development document makes it easier for you and your potential supplier to create a long-term business relationship and meet each other’s expectations.

What are the Differences Between RFP, RFQ, and RFI?

Sometimes, an RFP is confused with a Request for quotation (RFQ) or Request for information (RFI). But in fact, RFQ and RFI are subsets of RFPs representing the first level of proposals to resolve a business problem or project need.

RFI is a document containing written information or clarifications about the capabilities of multiple vendors for comparative purposes. RFI is utilized to gather information for comparison and to help make a business decision about the best candidate. It is typically merged with Request for Proposals and Request for Quotations (RFQs) to solicit potential suppliers for their strategy, skills, and capabilities.

RFP and RFI are employed in the early stages of vendor selection, with the RFI usually sent before the RFP. The format of the RFI varies depending on the details the client is looking for, while the RFP goes beyond the basic information and requires a specific description of the required results.

Key Steps in the RFP Process

RFP software development is a worldwide practice, but there is no single standard that fits all organizations. From an amateur’s perspective, there are countless ways to get this wrong. Therefore, let’s run through the RFP for software development process together, ensuring you’re confident in your ability to compile this crucial business document on the go.

Discovery Phase

The discovery phase with key stakeholders is the first step in the RFP process. You’re looking for three things:

• What do you need to create an RFP? Set project boundaries, develop a realistic schedule, and include an estimated budget.
• Who will execute and manage the RFP process? These individuals should have the organizational and project knowledge necessary to complete a detailed RFP and adequately evaluate submitted proposals.
• How will this affect the company? Consider how this decision might affect ongoing projects, your organizational budget, and your relationships with internal teams and third-party vendors.
• Who will write RFP for software development? The creator of the RFP for software development should know Agile methodology, have a clear understanding of the project,, and be good at decision-making. The Product Manager may take on this task with assistance from relevant experts. Also, it can be the product owner, project manager, or business analyst. Assign one specialist and provide him access to all technical advisories.

Tip. In this meeting, discuss the broad business goals you could meet with this project and your estimated budget. You will also need to decide on how to evaluate different vendors and what categories are top priorities for your needs, such as security, speed to implementation, project functionality, etc. For transparency and fairness, evaluation criteria must be agreed upon before sending the RFP.

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Prepare RFP 

The next step is the actual drafting of the RFP. It is the most crucial part of the process, as a well-drafted RFP is essential to identify the issues you must address. The more comprehensive the document is, the better, as this will enable potential vendors to understand the problem more thoroughly while offering more effective solutions.

Tip. Look at various RFP samples to ensure everyone understands what the finished product will look like. Then, search out software RFP template ideas that can help you start drafting.

Distribute RFP among Vendors

You have a few options here: you can post the RFP on your website and notify potential vendors about it; you can post it on various RFP websites and online services; or you can reach out to vendors directly and send the RFP their way. 

Tip. Narrow down the pool of candidates in order to focus efforts. Only include those who have a high likelihood of success.

Score and Shortlist Proposals

As you receive responses, use your own scoring pattern to evaluate vendors, eliminating those that don’t meet your requirements. The process includes pinpointing strong spots among vendors and shortlisting those with the highest scores. 

Tip. Please clarify any questions that might come up from vendors during the timeline for response. Once it closes, you do not need to respond to vendors until you’ve decided.

Select the Best Vendor and Send the Contract

Once the response window closes, compare your shortlisted vendors to make a choice. Check all their contact references and reviews, ensuring consistency between what they share and what their clients say. Contact vendors if additional meetings or materials will help you choose.

Tip. Once you narrow it down to two or more best participants, negotiate between them, locking in a price and contract with your final choice. In the end, notify the non-winners and tell them why you decided not to go with their product or service.

What must be Included in an RFP?

The software RFP is composed of several key components that form its core. Together, these components make up a comprehensive and effective offering. Let’s go over these in depth.

1. Statement of Purpose

Begin the RFP for software development with a brief and clear explanation of why you are referring to the vendor. Formulate a general idea of what needs to be done in a few sentences. 

2. Company Description

It will be a good deal to start with your company executive summary. Tell more about what your company does, your core values, what you stand for, and who your customers are. That will help vendors understand not only your project but also your vision. 

3. Project Overview and Goals

Make this section highly itemized; it lets vendors know what you are looking for and if they can meet those needs. Remember—the more specific you can be, the better quality of your received bids. We recommend starting with such questions:

• What is your company’s mission related to this project?
• What is your idea?
• How will it look?
• What processes would you like to improve or automate?
• Who will use the final product?
• What flaws exist in your current solution?
• Do you see any potential roadblocks (e.g., an outdated tech stack)?

4. Project Scope and Deliverables

This will be the longest and most detailed part of your RFP for software development. Representatives of the software company will form a valid proposal and calculate the cost based on the details specified here. Therefore, it is essential to provide specific details for the following:

4.1. Project infrastructure requirements

What does your project need to ensure reliability, security, and availability? That will define the infrastructure you need. Here, you’ll need to outline a few things:

• For self-hosted solutions, what is your current infrastructure?
• What changes will you make to your networks and server room?
• What do you need from a developer-hosted solution?
• How will physical and data security concerns need to be addressed?
• What about intellectual property protections?
• How can access be limited?

4.2. Product requirements

How will your product function? Try to think in terms of 

• The user experience
  Write about what the user will see and be able to do. For example, “The user should be able to modify their preferences via their profile.”
• Product Capabilities
  Write about system-related abilities. For example, “The system should send out a message to the warehouse manager when the order exceeds 500 units.”
• Streamlining and optimization
  Detail things that should be automated so that users don’t have to take specific actions. For example, “The system should automatically submit a confirmation email for each order.”
• Entity details
  These are the characteristics of every entity in the new development. For example, the entity “Customer Service Ticket” should have the following attributes: customer name, customer number, date and time stamp, explanation of the issue, assigned agent, urgency classification, tech representative, and resolution.
• Process orientation
  Mention any processes that need to happen, even if they aren’t seen or driven by user action. For example, “The system must synchronize manual orders with online orders each night.”

4.3. Project management requirements

This part lets you clarify how the vendor will manage your software projects. In addition, asking about the project management tools or suggesting your own ones without which you cannot imagine the process (e.g., Asana, Trello, or Slack) is essential.

If you prefer agile methodologies, ask which process the IT vendor will implement in your project. Options include Scrum, Kanban, Lean, etc. Also, inquire if the IT vendor will provide a dedicated manager for your project. Some other important details to clarify in your software RFP document:

• Risk management. Detail your expectations for how the vendor should identify, assess, and manage project risks. You may ask vendor to provide a preliminary risk analysis with their proposal and to maintain an updated risk register throughout the project lifecycle. 
• Change management process. Specify how changes to the project scope, schedule, or budget should be handled. It’s a good idea to clarify such things as the process for submitting change requests, who makes the decision about accepting or declining changes, and how to figure out their impacts.
• Project documentation. Clear documentation is crucial for ongoing support, maintenance, and future enhancements. That’s why feel free to outline what kind of documents you should be provided with upon project’s completion: technical documentation, how-to manuals, or training materials.

4.4. Quality assurance requirements

It is a major part of the software delivery process because, with a robust quality assurance process, your vendor can deliver flawless software. It would be best if you got clarity on the following with your software vendor beforehand:

• Testing approach and tools used by the vendor
• How will the vendor adjust the testing process for your project
• The communication process between your and the supplier team

4.5. Team structure requirements

Regarding team structure, you should determine which domain experts, developers, UI/UX designers, security experts, system analysts, and other team members you need to achieve your project goals. If your team has the required proficients, they can cooperate with the supplier’s team. But if the supplier lacks some necessary specialists, hiring them may take additional time. This is also a good time to discuss whether you are interested in fully remote collaboration, dedicated teams, or hybrid.

5. Bid Structure and Requirements

What information do you need from vendors to decide? Are there any restrictions you want to place on the businesses that respond to your request? Give detailed instructions on the information you need from each software company. If every vendor sends you the same information, structured the same way, you can conduct a side-by-side comparison. Here’s an example of the commonly included data:

• Company name and background
• Location
• Project management preferences
• Qualifications of team members
• A preliminary project plan
• A vision of the final product
• Strategies for maintaining and support
• Cost breakdown 
• References

These are the essentials, but we think the more information you’ll get, the more informed decision you can take. So, here are a few more ideas on which data to ask from each bidder:

• Case studies. Encourage vendors to include case studies or examples of similar projects they have completed to see their experience and ability to handle projects like yours.
• Post-implementation support. Ask software companies to outline their support offerings post-implementation, including availability, types of support provided (e.g., phone, email, on-site), and any associated costs. 
• Innovation and continuous improvement. Although it may seem like not very important information, the vendor’s approach to researching and implementing new technologies and practices will influence the success of your project in the long-term. So, asking companies to describe the ways they stay up-to-date with new technology is not so bad idea.

6. Response Timeline

Remember that preparing a quality proposal with all the components that are most important to you is a difficult task, so be sure to give service providers enough time to put them together. Usually, the estimated time is from 30 (for projects that are simple enough) to 60-120 days (for extremely challenging projects). Set terms for the different stages of the request for proposals, in particular:

• Deadline for submitting formal bids
• Date for notifying final candidates
• The date range of initial and final interviews
• Deadline for candidate selection

7. Contact Points

While analyzing your requirements, vendors may have additional questions to clear up the project specs. Let potential suppliers know in what way they can contact you. If you want to receive RFPs to a specific email, specify it in this section.

Simple RFP Template for Software Development

Templates can be helpful for quickly creating your RFP for software development from scratch, as they already contain all the required fields that just need to be filled out. Here is an example of a software development proposal template request.

Project Name

Proposal Due Date 

[Your Company Name]

Your Company Description

[Describe your company and the products/services you provide]

Project Overview

[An introduction that covers the state of your product and what pain points need to be tackled by the software development project.]

Software Development Project Goals

[Define clear and achievable goals and your aims]

• Goal 1
• Goal 2
• Goal 3

Technical Requirements

[Provide more detail for your technical requirements]

Project Timeframe

Budget Details

[Any vendor needs to know how much you’re able to pay them for their services before they move forward with their bid]

Candidate Evaluation Criteria

• Criteria #1
• Criteria #2
• Criteria #3

Project Due Date 

Contact Name 

Contact Email 

Contact Phone Number

Best Practices for Writing a Strong RFP

Here are a few practical tips to help create an effective software development RFP in 2024.

• Avoid abstraction as much as possible. Try to be on the point in every section of the RFP structure. Remember that the sense of this document is to provide clarity, context, and transparency to the vendors.
• Don’t go cheap. If you’re low-price oriented, you may end up with less functionality/slower development/ lower quality (and even higher overall costs).
• Don’t include too many project goals, and don’t make all selection criteria your top priorities. This way, you will see more realistic offers from suppliers and better match your time and budget.
• Don’t focus on a probable solution in your RFP for software development We suggest you describe your pain points in detail rather than go into the details – let the vendors offer their suggestions, which can be much more effective.
• Try to evade your internal jargon. Suppliers may not be familiar with your company’s terms and abbreviations.
• Separate the must-haves from nice-to-haves and wishes. Decide what’s needed for the MVP (minimal viable product). What can come next? What’s great but won’t hurt if you can’t have it? The more clear-cut your needs are at this stage, the more accurate the price will be and the fewer surprises.
• Consider using electronic sources and signature tools. The electronic source provides seamless distribution of RFP materials, audit trail, and response storage, while the electronic signature helps to reduce delays in signing and provides version control of documents.

Final Words

The value of RFP for software development in 2024’s competitive environment is undeniable. It has become a tool for identifying and establishing partnerships with a strong software company like Relevant.

Our experience in the market for more than nine years shows that we build effective and strong partnerships, providing the highest quality software development services. We сoherently handle each project and deliver first-class solutions per RFP for software development requirements.

With a dedicated business style, a client-focused approach, and a seasoned team, we can impress and retain customers by demonstrating the highest quality of software development services. We help companies capture all significant business operations, offer a variety of work models, including team augmentation and dedicated teams, and build productive collaboration. Get in touch with our team to get your projects underway.

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