How to Write an eCommerce Request for Proposal (RFP)
Understanding the Technology Lifestyle
"We just implemented this software…what do you mean we should start looking at other options?"
Sound familiar? Implementing and deprecating technology platforms in business is a cyclical process, typically starting with unmet business expectations to increase revenue directly/indirectly or decrease costs. Even worse, is running into showstoppers related to compliance, major features, or the vendor moving in a different product direction. This is particularly true in the eCommerce and Digital Commerce technology ecosystem where adoption, growth, and expansion in the market has been exponential. Many organizations are now through their first or second iteration of this cycle and dialing in what they really need over being told what they must have.
Whether this is your first time heading to the market for a new eCommerce solution, or you are a seasoned veteran, a Request for Proposal (RFP) document is a fantastic way to get started. Done correctly, the RFP generates internal alignment on your needs and allows you to collaborate with vendors on a consistent and unified baseline of information. Inherent in all of this, is mitigating risk to make sure we are setting ourselves up for success in the future. At Luminos Labs we read a lot of RFPs, and we believe we have learned a thing or two about what works and what doesn’t. In fact, picking a new eCommerce platform with organizations like yours is something we do regularly. If you want to learn more about picking a Systems Integrator or platform first, take a look!
So, how do you write an eCommerce RFP? Let's get started with a primer and steps to position yourself for executing like a pro.
Preparing for Your eCommerce RFP
A large ingredient in your digital commerce capability is the software platforms enabling it all to work along with an experienced system integrator. Over the course of time, you may find yourself in need to look to make a change to that software ingredient for a number of reasons. If you are in the process of looking to implement a recent technology to support your eCommerce function, or replace a current technology, you might be asking yourself the following questions:
Where do I start researching?
How do I start this process internally with my peers and stakeholders?
Why exactly are we looking at making a change again?
What do my internal users and external customers need?
Spoiler alert! Before you start putting pen to paper of the RFP, you are going to find that creating the RFP itself is a deliverable among numerous pre-requisite activities and small deliverables that answer the above questions. If that sounds exhausting and you'd rather start demoing software solutions and signing NDAs out of the gate, take a look at 8 core reasons why digital transformations fail. Welcome back. That does not mean you can't talk to vendors and get a window-shopping demo to help articulate your problem-statement, but it does mean you should stand your ground if pressure to move forward from the vendor presents itself. You are the buyer.
The key to this approach is prioritizing the questions and answering the most important ones first. Tackling a new eCommerce initiative in this way will allow you to determine what is critical to the company, get buy-in from the internal teams, and have a clear statement of solution needs as you branch out into the technology marketplace.
The 13 Steps for a Killer eCommerce RFP
Step #1 – Generate a Core "Why" Message
The first thing you should determine is how necessary a modern technology is for your company's eCommerce experience. Ask yourself these questions and articulate them as a story: How do we quantify the problem? What’s at stake? Why do we need to rebuild now? What if we do nothing? It is vital to ensure the executive and management teams agree on the answers to these questions. Make it a small group exercise and do not go solo on it. You may not have the full "Why" uncovered on Step #1 but you do need a problem statement to start off with.
Step #2 – Identify the eCommerce Stakeholders
Determine who in the company will be affected by this change. Later, you will need to meet with them to understand how they interact with your current eCommerce platform and online store and exactly what they want in the new solution. Your eCommerce stakeholders may span most of your business functions, depending on your sales channel model. If you can do this with suppliers, a subset of customers, and employees then you are on the right path. Briefly preparing a few leadership members to prime them for future conversations is advised; planting the seed early as possible.
Step #3 – Determine Goals and Objectives
It is crucial at this point to determine the goals and objectives for this project. The goals should specifically address the needs of the company, and the objectives should help achieve the goals. Agreement with the executive team and stakeholders is critical as these goals and objectives will keep everyone heading in the same direction. Think about how this helps your customer experience, internal operational efficiencies, and increasing revenue/decreasing costs. Tie it to the overall company strategy. Limit yourself to a handful of goals and objectives, otherwise you'll find yourself with an indigestible scope that more resembles an initiative than a project.
Step #4 – Evaluate the Current Solution
Ask important questions about the current solution: What features are critical? What works well that you want to keep? What doesn’t work well? It is helpful to try to monetize each feature of your digital commerce experience and rank by its importance of value. Isolate where the software is not meeting your needs vs. where business processes or people-skillsets are holding you back. Take a very hard look at what is working well with the software now. You may find the technology can do what you need but it hasn't had the right time and attention. Moving to new software that results in the same set of problems because the root cause of them isn't technical is a poor use of time and budget.
Step #5 – Review the Competition and Industry
Now his is an excellent time to look at what your competitors are doing and make a list of the things you want. Also, look at other online stores outside of your product area and identify what you like. Determine if this would be helpful for your customers and include it in your list of desired features. Being able to show future potential vendors these features will allow them to show their equivalent (or not). There is no shame in playing catch-up to others with feature parity - take what they have done and make it better!
Step #6 - Pause
By now you've done a fair amount of strategic discovery and you're about to head into deeper tactical discovery that will require additional commitment of people's time, often outside your immediate team. Now is a great time to critically reflect on if the juice will be worth the squeeze. There is a potential that your current software is adequate and capable of getting you where you need to go, but instead people and process opportunities are present that could be tackled. That's risk mitigation at its finest! But, if that isn't the case, let's press forward.
Step #7 – Create an Integration Inventory
It’s time to talk to your colleagues in IT and compile a list of the systems that must connect to the eCommerce platform These systems may include ERP, order management system, inventory system, credit card processing service, tax system, shipping services, etc. An amazing way to do this is to demo your own website to yourself and IT to understand where certain data is stored, transferred, and modified from an inbound/outbound standpoint. You don't need to get crazy with specifics here, but a basic System Context drawing is a great place to start. You will build on it later. Now is also an excellent time to produce a list of cybersecurity and compliance requirements as well.
Step #8 – Determine your User’s Needs
Remember Step #2 above? It will be useful now. Users are people inside the company who interact with the site or product. These are often merchandising teams that are creating products, planning teams that are setting prices, creative teams creating content and images, and marketing teams planning promotions. Determine what they do, what they like, and what they want to change. Make the conversation points consist across all groups so it is easier to consolidate sentiment and needs across multiple personas. It is best to keep these conversations in small groups or individuals - yes there will be more of them, but the quality output will be worth it. Make it about them and always think about how you can make their job easier.
Step #9 – Identify your Customer’s Needs
We're going to refer to Step #2 again! Hopefully, you have identified a few customer segments that buy from your organizational, both online and offline if you have a mixed channel model. Complete a brief discovery session with these customers for feedback on what they like and do not like about the current digital experience. Collaborate with your sales teams on this effort so you get a variety of customers and build relationships. A "throw a net into the ocean" survey could be done here, but we encourage fewer, more intimate, conversations to be executed based on your core target market.
Step #10 – Document Key Features
You will need to spend time reviewing the feedback from the various conversations into a lengthy list of features. This will be the key tools and functionality for the new platform - you do not need detailed specifications at this point. Spend time analyzing the feedback and consolidating where you can.
Step #11 – Write the RFP
If you have followed the previous steps, this should be easy. You can create a structured document that includes all the things you have uncovered, starting with your goals and objectives, including the details of all the roles and customers, providing details on integration, and finishing with your prioritized features. Through the RFP it should be clear that you are shopping around, you are looking for a strategic partner, and that you are evaluating the big picture. Set clear expectations in this document and establish yourself as being intentional with a purpose through the due diligence you have completed in the above steps.
Step #12 – Identify Potential Partners
Now you can research platforms and implementation partners. A few ways to do this are through syndicated market research content, peer recommendations, conferences/events, or simply open searching on the internet. Complete your due diligence here and generate a shortlist to 3-6 solutions. Once evaluated, you can send the RFP through whatever contact method the vendor provides and prepare to move to the next phase of the project of executing a System Selection.
Step #13 - What Happens Next?
After receiving the responses from the partners, compare their responses with your preferred answers, and then choose to take the next steps with partners that best meets your needs. Through this step you will likely complete introduction discovery sessions, demos, evaluations, etc. with the ultimate goal of picking the best platform to meet your intentional business needs, create a positive customer experience, and providing the right tools for your team members to execute their jobs with ease.
Avoid Strategic Pitfalls
The investment of time you will have put in within the first steps of this exercise will have paid off at this point to make sure major risks have been avoided and you are not looking to change to a new platform within the first six months (at least within your control).
Tips to Avoid the Most Common Strategic Pitfalls
Establish an expectation of timelines. Do not let management or yourself set an unrealistic timeline. Be sure to set aside enough time for initial planning. Common timelines are below, but highly dependent on how impactful the software is to your business:
Organization – 1-2 months
Planning and Executing the RFP and Sales Process – 2-3 months
Project Execution Post Selection – 3-6 months
Establish an expectation of budget. With a brick-and-mortar presence, companies know what to expect when it comes to opening a new branch regarding Capital Expenditures. A digital commerce branch will have similar fixed costs and initial investments required to get the technology up and running. You do not want to venture too far down the path of the RFP process if some semblance of a budget isn't pre-approved or justified through other means. Early in the process you are simply looking for order of magnitude (how many 0's) numbers.
Selecting a new platform starts with business intention and change. Understand business needs before going to your internal IT teams. Your internal IT team will appreciate the initial due diligence and justification of importance over simply adding it to the project plan list with everything else. The information you gather will help you both with understanding what projects/initiatives NOT to do.
Do not let management insist your current IT teams can complete the project. Your current team is an expert at managing what they currently have and many traditional technology functions that serve to keep the whole business operational, safe from threats, and efficient. You will need help, so expect to use an outside implementation partner to get started.
As mentioned at the beginning of this article, do not go online and start evaluating new platforms first. You do not know what you need yet, and this will slow down the process, as your focus needs to start with your business needs and goals.
And finally...
Crafting an effective RFP is crucial for setting yourself up for success. By following the 12 steps outlined in this guide, you can align with stakeholders, provide potential vendors with all the information they should need, and streamline the process with less confusion. All the while, mitigating risk!
For more information and assistance, feel free to contact us and we would be glad to help navigate through some of the complexities of picking the right technology within the digital commerce space.