Businesses constantly endeavor to expand their offerings, technology refresh enhancing their operations and support capacity and capabilities, to name a few. To achieve this they may have to go outside their organization who can provide these capabilities. In order to get this done, the business outlines its requirements in a detailed document in the form of a Request for Proposal (RFP), Request for Information (RFI) or Request for Quote (RFQ). An RFI typically precedes RFP or RFQ and is used where there are many potential vendors and not much is known about them. Once the RFI is completed, the next step would be to float a detailed RFP or RFQ and solicit responses from vendors providing these solutions and services.
These vendors respond to the RFP through a formal proposal document. A proposal puts the buyer’s requirements in a context that favors the vendor’s products and services and educates the buyer about the capabilities of the vendor in satisfying their needs.
Proposal Management is a key step in the process of acquiring business from a prospective buyer. Typically a proposal would include, but not limited to, information about the vendor, demonstrated knowledge about the business requirements and implementable solutions to address them, the methodology of providing solutions, team structure, pricing structure and quality processes for high-quality deliverables that need collaboration across many departments.
A Proposal Management System (PMS) helps create the responses to the RFP in an easy and collaborative manner where there is a central repository of all information pertaining to the response at a glance. It may be important to note that the RFP itself is a procurement process and its generation may not align in the context of PMS.
What is a Proposal Management Software?
In order to streamline the proposal creation process and minimize cumbersome data collection/reviews/updates/reconciliation through manual methods like emails, chats and verbal communication, organizations adopt software that helps the end to end process on a single platform. PMS helps organizations manage the proposal process with a view to increasing sales efficiencies through automation. Vendors may now quickly create strong proposals and responses to RFPs that are tailored to the needs of each buyer. It is essentially a content collaboration tool for teams like sales, marketing, and project delivery personnel to collaborate effectively to achieve the end result of addressing the requirements of the RFP. This software is mainly in the realm of sales and marketing.
It is worthwhile to differentiate the contract management software and PMS in that the former provides features like creation and management of contracts, service level agreements and procurement agreements that are legally enforceable whereas the latter facilitates the creation of a documented offering of products and services. A proposal would eventually lead to a contract. The other perspective is the CPQ software that is typically used in B2B scenarios that enable sellers to configure, quote and price specific goods only.