Fi Marcham | Senior Manager, Bid Team, CloudPay
- Creating an internal RFP strategy
- Problems: What are you struggling with in your current model?
- Objectives: What are your payroll team and business trying to achieve?
- Identifying and prioritizing the questions
- Get specific
- Get the right people involved
- Crafting your RFP questions
- What answers are you looking for?
- What differentiators matter to you?
- Ask with purpose
- Deploying the definitive RFP
- How does your structure support a streamlined RFP process?
- Have you covered all the right details?
- How extensive will your review process be?
For many multinational companies, moving from a decentralized supplier landscape to a truly global payroll solution involves multiple steps. Before a company can implement a new solution and onboard its payroll team, it needs to build a business case, win internal buy-in, vet potential suppliers, and finalize an agreement with its selected service provider.
To successfully navigate these processes, many companies use a tried and tested approach to selecting a new service provider: the request for proposal, or RFP. An RFP is used to elicit ‘like-for-like’ responses from potential suppliers for any given service or product. At a minimum, RFPs should specify what a company is looking for, and establish the criteria that are going to be used for evaluating the responses.
By following a few essential best practices, key stakeholders, such as payroll, HR, and Finance teams, at multinational companies can engage in a more strategic approach to RFP creation, deployment, and management. This will ultimately help their company select and implement a global payroll solution that aligns with their broader goals and objectives.
Create a goals-driven internal RFP strategy
While there’s nothing wrong with reviewing an old RFP as part of your process, to start there is skipping a step. Beginning with questions to understand current problems, future objectives, and what the company hopes to gain from a new supplier, is a much stronger RFP process.
Taking an end-to-end look at your existing circumstances is an essential part of supplier selection, as is mapping out how a payroll transformation aligns with departmental and company goals. From there, you can craft a smart strategy for your internal RFP management.
Problems: What are you struggling with in your current model?
Your company wouldn’t be pursuing a new solutions provider if you were happy with your current approach to global payroll. To help prioritize the questions and concerns most important to your RFP, map out the pain points – large and small – that you’re struggling with now. These could include:
- Managing too many suppliers, resulting in poor visibility and inadequate control over your payrolls
- High rates of re-runs and supplemental runs, leaving you with bloated country or regional costs
- Poor or no integration with HR solutions
- IT challenges (bandwidth, downtime), potentially leading to user experience issues such as functionality and usefulness
- Compliance gaps or lapses, resulting in possible data security issues or concerns
Objectives: What is your payroll team trying to achieve? What about your business?
A global payroll transformation isn’t just a change for payroll – it’s a change for your entire company. Payroll touches every employee in a multinational company and interacts with many different departmental functions. It plays a crucial role in enterprise initiatives, such as overseas expansion (or contraction), recruitment and talent management, and cost-cutting. Consider the objectives for both payroll and the broader business. Are you trying to:
- Decrease payroll errors and costs, by automating more of the payroll cycle?
- Support global or regional expansion into new countries, to eliminate shadow payrolls?
- Lower payroll headcount, by consolidating your payroll into a global shared service?
- Decrease IT bandwidth dedicated to payroll, by shifting all enterprise solutions to the Cloud?
- Integrate with a new ERP or HCM solution?
- Gain a global view of payroll costs and performance by eliminating internal invoicing and enhancing your analytics capabilities?
- Standardize processes across geographies, resulting in enhanced data security and compliance management?
By engaging in more thoughtful, strategic thinking in advance of developing your RFP, you will set your company up for greater success in supplier selection. Armed with a solid understanding of your company’s current issues and future objectives, you can start mapping out your global payroll supplier selection approach, beginning with your internal RFP action plan.
Strategy: What is your internal plan for supplier selection?
Having an internal game plan will make it much easier to manage the process down the line. Questions that will help you craft an internal RFP strategy include:
- What is your target date for having a new solution implemented?
- What countries are in the project scope? Have any been left out of the change project, and why?
- How long will you give suppliers to respond to the RFP?
- Who in your company will be involved in creating the RFP, and who will be reviewing the suppliers’ responses?
- Do you have an existing shortlist of suppliers? Why or why not?
- How will you evaluate the suppliers’ overall submissions?
- Do you have executive buy-in and an approved budget?
Think about how many proposals you want to receive and how much time, thought, and effort should go into the review cycle for a decision as significant and wide-ranging as a global payroll solution change. Even four RFPs are a lot to review. Often one or two suppliers out of four could be eliminated based on information easily accessible beforehand via sales calls, product demonstrations, or virtual or in-person Q&As.
Identifying and prioritizing the questions
Once you have a holistic understanding of your problems, objectives, and internal strategy, you can begin focusing on the meat of the RFP: the questions. Ultimately, your RFP questions are the foundation of your entire supplier selection process.
The typical RFP is packed with generic questions. Of course, plenty of those generic questions may be important to stakeholders within the buyer’s company; however, often, many are not.
As you have assessed your company’s needs, goals, scope, and budget, and crafted an internal RFP strategy, ideally, you should also define the holistic priorities of your global payroll change project. As you develop the RFP document(s), you should drill down even further into what matters most to the various departments and stakeholders.
Get the right people involved
There are typically five functions at your company that are directly connected to the execution of global payroll: HR, IT, Finance, Operations, and Payroll. With larger companies, that have very targeted departmental functions, there may be many more areas of the business to consider, such as Benefits Administration, Shared Services, and so on.
For each of those functions – as well as each of your global office locations – ask yourself and your payroll-change project team the following:
What are the department’s must-have features and functions?
- System-to-system compatibilities
- Uptime/support/service coverage needs
- Technological capabilities and process controls
What are your nice-to-have features and functions?
- Automation and efficiency/productivity enhancers
- Process monitoring and data analytics tools
- Improved user experiences and integrations
What is the must-know information for the department regarding a new solution?
- Licenses, certifications, and product or service specifications?
- Workflows, oversight, and management processes?
- Product roadmap and expected system changes?
What factors would eliminate a supplier?
- Missing or lacking features, services, or functionalities
- Cost, service model, contract, or liability issues
- Supplier culture or other intangibles
Armed with the above information, you can determine which needs, wants, and concerns take priority over others. You can ensure that each topic is addressed in the RFP at the scale to which it matters to your business by placing high-priority questions higher up, and by weighting responses according to business-wide priority in your scoring system.
You can also use this information to trim generic, filler questions out of your RFP entirely. Whether you decide to revise a modifiable template like this one from CloudPay, or create a new one from scratch, you should ensure every question aligns with a specific piece of information you need to know.
Crafting your RFP questions
Once you have your needs appropriately identified and prioritized, it’s crucial to pose and present your questions to help you receive the most useful, applicable, and insightful responses possible.
What answers are you looking for?
For every RFP question you ask, you should know exactly what answer you’re looking for or what response you consider ideal.
Presenting your questions in a way designed to elicit a specific answer, will simplify your review process down the line. As an example, consider this question from a typical global payroll RFP:
“Describe your process for post payroll verification.”
The company would have received a more direct (and perhaps more helpful) response by asking a more specific question: “Will you notify our payroll approvers when approvals are needed? If so, how?”
What differentiators matter to you?
Prompt suppliers to provide the follow-up information that will differentiate them from the other service providers who are under consideration. If you ask: “What reporting and analytics capabilities do you offer?” followed by, “Can users create custom reports? How? Is there a cost?”, then you’ll get answers that will truly differentiate them from other service providers.
Ask with purpose
While the impulse to ask broad questions, and see how suppliers reply, is understandable, it’s also a sure-fire 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 company. Use your RFP questions to get that information from potential providers. If follow-up or additional details are necessary, ask for them in the RFP to ensure that your stakeholders have everything they need when it’s time to review proposals.
Deploying the definitive RFP
Once you have written your questions and organized them in terms of priority, it’s on to the final stage before circulation: structuring your RFP thoughtfully and providing all the appropriate information.
How does your structure support a streamlined selection?
Whether your company’s preference is to use a Word document, an Excel file, or an online tool, the following best practices are essential:
- Use one file type: Make sure suppliers can review your questions and provide their responses all in the same file type . By sending out a pdf and requesting back a Word document, you’re only creating extra work (for your company and for suppliers) in cross-referencing one document against another.
- Organize with intention: Arrange your questions according to how your internal stakeholders or departments will need to review the answers. For example, if your key functions are HR, IT, Finance, Operations, and Payroll, consider making those the section names for each function’s associated questions.
- Avoid over-complicating questions: Suppliers regularly see RFPs in Excel with as many as 20 columns per question! Usually, due to each column representing a single in-scope country, This kind of complexity is unnecessary and can lead to columns being missed accidentally.
Structure your questions in such a way that one question begets one answer. For example, if you have a set of questions that are applicable to all in-scope countries, consider putting these in one tab, and separate the questions that are country-specific, into their own tabs. From there, provide a simple way for suppliers to share follow-up information separately wherever needed, such as one column for additional responses.
Simplify and streamline: Find common-sense ways to save yourself effort upon review. Pose ‘yes’ or ‘no’ questions and provide word-count guidelines where short answers are preferred.
Suggest suppliers provide visual representations where appropriate, such as with system workflows or organizational charts. And always edit out redundant questions unless you really want to review the same responses twice.
Have you covered all the right details?
Ensure that the rest of your RFP supports a smooth and efficient review cycle. Your questions may be the most important part of your RFP, but they’re not the only important part. The rest of the information you provide will dictate how smoothly and efficiently you can move through the supplier selection process. In addition to your product- and service-oriented questions, your RFP should include:
- Background information on your company and its lines of business
- A set of specifications describing what you want from a sought-after solution
- Evaluation criteria disclosing how proposals will be graded
- A statement of work describing the tasks to be performed by the winning bidder
- A reasonable timeline for the supplier selection process
- A timeline for the full project, spanning negotiation, implementation, and onboarding
The more clear, realistic, and reasonable information you provide, the more likely you are to be pleased with the outcome. In instances where companies fail to provide the above information – omitting a full statement of work, for example – the more likely that problems may arise as the contract or purchase order is being finalized.
How extensive will your review process be?
As you crafted your internal RFP strategy, we suggested you consider how many RFPs you want to review and explained that any more than three is probably unnecessary and over-complicating the process.
By engaging in the steps outlined in this blog, you’ll understand your problems, needs, goals, and timetable well enough to easily refine your pool of suppliers to only the companies that can meet your specific requirements.
To earn the highest return on investment (ROI) from your RFP process, we recommend selecting a global payroll managed services provider that can deliver all of the following system benefits, in addition to reliable managed services and support.
- Process optimization: Spot and eliminate gaps, inefficiencies, or weaknesses in your workflow and compliance measures.
- Workflow automation: Establish pre-set processes and timelines that automate as much of the end-to-end payroll process as possible.
- Global standardization: Create global processes across all your locations, with custom steps for country-specific requirements.
- Modern interface: Employ an attractive, easy-to-navigate system across your entire payroll function.
- System integration: Seamlessly import or transfer data from your HR and Finance systems into their payroll technology.
- Data integrity: Catch errors automatically through pre and post-processing checks on all your payroll information.
- Digital calendars: Monitor progress across all your payrolls using a cloud-based calendar linked to your global workflow.
- Compliance tracking: Maintain global compliance and track potential issues and resolutions in real-time.
- Analytics: Provide access to a dashboard view of your payroll performance at the global, regional, country, or payroll level.
To help you reach that end, CloudPay has created a specialized RFP template that’s ready to be customized for your company’s needs. Be sure to refer to this blog if you need any help in creating your definitive RFP – and good luck in your supplier selection process.