Building a Successful Global Payroll RFP: Part 3 - Crafting Your RFP Questions
Jul 20, 2017 | Tag: Strategy
Transitioning from a decentralized vendor landscape to a true global payroll solution can be a long process, especially for multinational organizations. A key component of that journey is the familiar request for proposal, or RFP, which companies use to solicit bids from potential service providers.
A common misstep in the vendor selection process is posting repurposed RFP files with broadly written questions that don’t elicit the precise information an organization needs to make a sound, strategic choice.
This blog series from CloudPay outlines the four essential steps to creating the definitive RFP, whether for selecting a global payroll service provider or another enterprise software solution. The previous posts (part 1 and part 2) helped readers to design a goals-driven internal RFP strategy and identify the information necessary for vendor selection. This third part will help you write and organize RFP questions that demand useful, complete responses.
Get your file ready or download our specialized template, and let’s take the third step in creating your definitive RFP.
Step 3: Question
Craft questions that demand actionable answers
Once you have your needs appropriately identified and prioritized, it’s crucial to pose and present your questions in a way that will help you receive the most useful, applicable, and insightful responses possible.
What answers are you asking for?
For every RFP question you ask, you should know exactly what answer you’re looking for or what response you would consider ideal. Many RFPs fail – or end up in overlong selection cycles – simply because the buyer organization didn’t define in advance what would differentiate a ‘good answer’ from a ‘bad answer.’
The problem is exacerbated by buyers’ tendency to ask open-ended questions (such as “How do you handle ____?”) or pose non-question prompts (such as “Detail how you _____” or “Describe your approach to _____”).
Of course, open-ended questions and prompts have a place in the RFP, but organizations should be wary of allowing them to complicate things unnecessarily. Open-ended questions often beget vague, rambling answers that are difficult to judge and weigh against those of other vendors.
Presenting your questions in a manner designed to elicit a specific answer will simplify your review process down the line. As an example, consider this common prompt from a typical global payroll RFP:
Describe your process for post payroll verification.
Because every payroll provider has a unique process for post payroll verification, this a valid concern to address in an RFP. But the way the prompt is phrased makes it impossible for the vendor to know what kind of response the buyer is really looking for. Consider these two responses.
Our payroll application has an online workflow approval tool whereby the customer’s payroll approvers are notified when approvals are required.
Our solution has an online workflow approval tool within the application that is used to manage the payroll approval process. The customer’s designated payroll approvers will be part of this process and will receive automatic emails informing them of each action item and status. Each payroll run requires the customer to be part of the approval process. Payroll runs cannot be closed without our customers completing this step in the workflow process. In addition to country statutory reporting, our post payroll verification processes also involve validating and cross-referencing information from Gross to Net, Payslips, General Ledger, and Payroll Exception reports against the customer’s pre-processing. Each step of initial and secondary checks are recorded in real time in our system control portal to ensure the checks have been completed and that control totals tally.
Which response is more appropriate? It’s impossible to tell, because it’s impossible to know how much or how little information the buyer was hoping to receive or what concern motivated the organization to ask about post payroll verification.
The company would have received a more direct (and perhaps more useful) response by asking a more specific question, such as “Are payroll approvers notified when payroll approvals are necessary? If so, how?”
What differentiators really matter to you?
Ultimately, it’s about quality over quantity when it comes to both your questions and vendors’ responses. But to boost the quality, sometimes you will need to boost the quantity.
There’s a pitfall to asking questions with clear answers in mind: receiving identical answers from every vendor. To avoid that, you need to prompt vendors to provide the follow-up information that will differentiate them from other service providers in consideration. Consider two responses to one question:
What reporting and analytics capabilities do you offer?
With all calculations in one system, reporting is simplified. All reports are in a consistent format, allowing you to access the necessary information more readily. This consolidated approach allows you to retrieve highly selective data quickly and easily. Information can also be passed along to your tax provider, accountants or relocation company. Integrated and consolidated reporting provides greater visibility and controls.
CloudPay Analytics allows you to create the reports needed to support in-country reporting and end-to-end process analysis. In addition to standard payroll processing reports, you can see real-time progress reports; data input and accuracy reports; team performance reports; overall account information and headcount distribution; costs and errors by payroll, country or region; and much more. You can also design your own views and dashboards to visualize the data housed in the CloudPay system.
There are telling differences between the two responses, most notably that Response 1 does not use the world “analytics” or mention any customization options.
But if the buyer organization asks no follow-up questions, they won’t glean any truly differentiating information from the two vendors. The same is true if the buyer only asks baseline follow-ups, such as “What standard payroll reports do you offer?” which will likely elicit identical responses from the two vendors.
By asking more targeted questions around reporting, the buyer can elucidate how much better equipped one vendor is compared to the other.
For example, questions such as “Can users create custom reports? How? Is there a cost?” would likely elicit subpar responses from Vendor 1 – which does not offer custom reporting capabilities – whereas CloudPay would respond as follows:
CloudPay Analytics provides a full suite of business intelligence tools enabling customers to design their own custom reports, views, and dashboards within minutes. Members of the customer’s team will all receive "view" access to CloudPay Analytics dashboard (based on their role and permissions), and one member of the customer's team will also receive "designer license" access – enabling them to create new dashboards for the organization at no charge. Training will be provided and support is available when necessary. Additional designer licenses are sold separately.
Ask with purpose
While the impulse to ask broad questions and see how vendors reply is understandable, it’s also a surefire way to get vague or irrelevant answers. By now you’ve identified the specific information your payroll-change project team needs to make the right choice for your organization. Use your RFP questions to get that specific information from potential providers. If follow-up or additional details are necessary, ask for them in the RFP to ensure your stakeholders have everything they need when it’s time to review proposals.
Next up: Building and deploying a process-oriented RFP
You’ve defined your internal strategy, identified your needs, and written your questions. Now it’s time to create your RFP and send it to your chosen contenders. By following some key best practices in finalizing the RFP, you can ensure everyone involved has the information they need to make the best choice for your organization.
Get your RFP file ready or download our comprehensive template, and stay tuned for the next blog, which will take you through the final step in creating the definitive global payroll RFP.