The request for proposal or RFP is one of the most challenging and important initial steps any organization can take toward better global payroll. Yet, many companies don’t give the process proper consideration, sometimes recycling previous RFPs or even borrowing from a file recently used by a related function, such as HR. Such an approach almost ensures any proposals received will fall short of addressing your needs and concerns, likely leaving you ill-equipped to decide which payroll solution is right for your organization.
Executing an effective RFP that elicits the information you need from potential providers is a considered, four-step process that begins with thoughtful reflection on your current solution and changing needs. To help guide you along the journey, here are five key do’s and don’ts to keep in mind for your global payroll RFP:
Do Begin with Key Internal Questions
To many people, the term RFP is synonymous with questions. While that’s not entirely incorrect, some of the most important questions are often overlooked as teams embark on the process — starting with the strategic ones that need to be answered internally. A successful RFP is built around a goals-driven internal strategy that identifies current problems, considers future objectives, and requires stakeholders to clarify what they hope to gain from a new vendor. Additionally, a good strategy sets out a clear plan for vendor solicitation and proposal review, including how responses will be evaluated and scored, who will be involved in reviewing responses, and what the timeframe is for review and selection.
Don’t Solicit Too Many Responses
One of the most important decisions you can make early in the RFP process is how many proposals you want to review. Many organizations will open the process to as many vendors as possible, a move that ensures they will review more RFPs than they really need to. Creating a shortlist of providers to involve in the process is a key step that can save you hours of unnecessary review and help fine-tune your requirements. If you think you’re prepared to review any more than four RFPs, you’re underestimating how much time, thought, and effort should go into the process. Even one or two vendors could be cut from those four with information easily accessed over the phone or through a demo.
Do Prioritize Your Unique Needs
Each question asked in your RFP should aim to deepen your understanding of how each vendor approaches the areas of payroll that are most important to your organization, based on your recent strategic evaluation of your needs and goals. This is not a request for general information about a particular vendor or solution; you did that when you created your shortlist. The structure and content of your RFP should help communicate your priorities to the potential vendors and help them understand what information you are looking for to help you make the best decision for your organization.
Don’t Ask Catch-All Questions
Once your payroll needs are identified and prioritized, it’s important to craft your RFP questions in a way that will help you get the most useful and insightful responses possible. Every question you ask should have an ideal response — and you should know ahead of time what kind of answer you’re looking for. While it can be tempting to ask broad questions and see how vendors reply, it’s also a surefire way to get vague or irrelevant answers. Include follow-up questions upfront where necessary. For example, if better reporting is a priority for your team, after asking a more general question like ‘What reporting and analytics capabilities do you offer?’, you could ask ‘Can users create custom reports? How? Is there a cost?’
Do Simplify Your RFP File
Once you have your questions written and organized in terms of priority, it’s important to structure your RFP in a way that helps both vendors respond and your team review. Whether you choose to use a Word document, an Excel file, or an online tool, a few best practices will help ensure a well-presented RFP: use one file to ask questions and receive answers, arrange your questions according to how internal stakeholders will review the RFP (for example, sectioned by department), and avoid complex answer fields by allowing for one answer to each question. Finally, find common-sense ways to save yourself effort upon review, such as asking yes or no questions or providing word-count guidelines where short answers are desired.
The prospect of building and deploying an RFP is often met with dread, but done well, it’s an important and even enlightening opportunity to find real solutions to pressing issues and transform your global payroll for the better. For more insight and best practices, check out our four-part series on Building a Successful Global Payroll RFP, and for a useful payroll-specific guide, download the Global Payroll RFP Template, which include more than 200 questions designed to find the payroll solution you’re looking for.