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Zycus recognized as a ‘Strong Performer’ in The Forrester Wave™: Contract Lifecycle Management, Q2 2023  Read More

RFP Process for Choosing the Best-Fit Contract Lifecycle Management Software (CLM) Vendor

After shortening the list of CLM vendors to a handful, around 3-5, you need to choose the most suitable vendor from the list based on who meets your business requirements. The RFP (Request for Proposal) process helps the client select the best-fit contract lifecycle management software.

What is a request for proposal (RFP)?

A request for proposal (RFP) is a business document that an organization, usually a large enterprise, raises to elicit a response – a formal bid – from potential vendors for a desired IT solution. The RFP specifies what the client is looking for and highlights the evaluation criteria for assessing a vendor’s proposal.

They are preferred by most global enterprises and are used to objectively compare responses and zero in on the most suitable vendor.

When a project timeline is anticipated to take years, an RFP is crucial in choosing a reliable long-term contract lifecycle management software partner.

What are the different steps in an RFP process?

The RFP process consists of four high-level sections: Questionnaire, Assessment, Demo, and Final Selection. Each section is described below:

1.  Questionnaire

Drafting a questionnaire is the first step for building an RFP. The steps involved in sending out the questionnaire to enterprise contract lifecycle management software vendors are as follows:

  • Draft a well-structured questionnaire that aligns with your business needs
  • Questions should address your business goals to ensure that responses are tailored to your requirements only
  • Bucket the questions into different feature categories and have a scorecard for each category
  • Include pricing and customer support categories
  • Compile all useful data for the vendor and send it along with the RFP to avoid frequent back and forth
  • Clearly mention the deadline in your communication

2.  Assessment

Assessment of vendors is performed using a CLM RFP scorecard. These are a few steps to consider while building a scorecard for enterprise CLM software:

  • Create the scorecard in spreadsheet
  • Map the scorecard to the questionnaire sent out
  • Assign weights to the features based on their priority

The following should be considered after getting responses from the contract lifecycle management solutions vendors:

  • Score the answers on a scale of 0 to 5 for each question. The parameters for the scoring model are as follows:
Score Parameters Desired Stage Stage Description
5 Exceeds requirements with advanced AI-enabled features Best-in-Class Forward-looking organizations with processes and practices that are leading edge and allow it to anticipate both challenges and key opportunities and set the benchmark across industry peers
4 Readily meets the requirements Somewhat Digital Process practices are in place that are adequate in supporting the business under stable circumstances and enable it to develop, but lack visibility for effective decision-making
3 Meets the requirements with minor gaps (customization required) Somewhat Digital
2 Partially meets the requirements Somewhat Digital
1 Misses most of the requirements Laggards There is some process in place but there are many gaps that affect the day-to-day operations
0 Unable to meet the requirements Laggards
  • Read the questions left-right instead of top-bottom
  • Prepare follow-up questions for vendors based on their responses
  • Filter vendors based on their ability to meet requirements

3.  Demo:

An in-depth demo is beneficial to provide a detailed solution overview into the legal department. For a contract lifecycle management software demo, the steps to followed are:

  • Invite all the stakeholders involved in the function, such as IT, sales, procurement, along with the legal team
  • Make the demo specific to the different users
  • Record the sessions

4.  Final Selection:

The final stage in the enterprise contract lifecycle management vendor selection is the contracting and negotiation phase.  In this stage, the vendor and the client agree on the terms and conditions, post which the contract is rolled out.

Schedule a demo to learn how to select the best-in-class AI-enabled contract lifecycle management software for enterprise.

Author

Anthony Scannell is the Director of Sales at Zycus, a leading provider of cognitive contract software solutions. With over a decade of experience in the field, he has become a subject matter expert for Contract Lifecycle Management (CLM), helping organizations streamline their contract processes, increase compliance, and reduce risk. Anthony’s expertise in CLM has helped numerous clients achieve their contracting goals and drive bottom-line results. He is known for his deep understanding of the complexities of the agreement process and his ability to present solutions that meet the unique needs of each client. Anthony’s dedication to customer success and his passion for CLM make him an invaluable asset to the Zycus team.
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