How to create an effective request for proposal for your automation project

Why write a request for proposal?

A well-crafted request for proposal serves many purposes. Here are four key reasons to write one.

1. Clarify needs
   Business owners often know what they need… until they discuss with their team and attempt to put it all down on paper. Creating an RFP will help you create clarity and internal alignment around what exactly you are shopping for. By forcing you to clearly define the project’s parameters as well as your requirements and priorities, you eliminate ambiguities and ensure that your team is on the same page, making it easier to identify the right solution.
2. Support change management
   Change management starts when you begin preparing your project. “If you start thinking about it at implementation, you’re already too late,” explains Van der Poel. He stresses that involving your team early on is crucial, not just to define your needs but also to understand your employees’ pain points. “By finding out your teams’ operational challenges and crafting an RFP that addresses these concerns, you increase your chances of a smooth adoption,” he says.
3. Prevent vendor misunderstandings
   Writing a detailed RFP prevents costly miscommunication between your team and the potential vendor.
   
   “When things aren't written down, you often lose bits and pieces of information and then you have no proof of what was agreed on,” says Vincent Bombardier, Senior Business Advisor, BDC Advisory Services, Automation & Robotics.
   
   “Given that small misunderstandings can lead to big problems, having a robust RFP ensures that all expectations, requirements, and deliverables are clearly outlined and agreed upon from the start.”
4. Ensure competitive pricing
   Automation projects can be costly. An RFP allows you to compare different vendors. You create a competitive environment that can lead to the best possible pricing and quality. Comparing options helps you avoid overpaying and opens the door to negotiating more favourable terms.

When is it advisable to write a request for proposal?

While RFPs are a powerful tool, they require an investment of time and resources. To help you determine if an RFP is necessary, here are four key criteria to consider.

1. Cost
   If your project involves a significant financial commitment, an RFP is crucial for ensuring you get the best value, compare vendor options, and avoid overspending.
2. Disruption
   When your project is expected to cause short- or medium-term disruption to your business operations, an RFP becomes essential to ensure that the vendor can provide a solution that minimizes downtime and maintains business continuity.
3. Strategic impact
   If your automation project plays a key role in your strategic plan—such as enhancing your ability to run operations efficiently or scale your business—an RFP is strongly recommended. It will help you identify a solution that aligns with your long-term goals and provides the best return on investment.
4. Expertise
   When the project you are preparing sits outside of your core expertise, an RFP is crucial to identify vendors with the specialized knowledge and experience needed to deliver the best solution.

“If any of those criteria apply,” says Van der Poel, “it's highly advisable to prepare an RFP.”

How to identify your needs and requirements

Before putting pen to paper and drafting your RFP, you need to identify your needs.

To determine your needs, organize meetings with your operational teams. Speak with employees on the ground—those who use your machines and software every day—to understand what they need. Additionally, make sure to consult with leaders in each department to gain a broader perspective on how the project will impact the organization as a whole.

“By involving your health and safety personnel, for instance, you can ensure that the equipment complies with the necessary safety standards and regulations, such as those established by the Canadian Standards Association (CSA) or other applicable standards,” illustrates Bombardier. “Similarly, your IT coordinator might point out that, since the company plans to collect data from all equipment in the plant within two years, your new machine should be compatible and easy to integrate with the upcoming systems.”

This is where consulting an independent third party to advise and assist you can help.

“The issue with having someone from the company driving the project is that they’re often seen as having an agenda,” explains Van der Poel. “An independent advisor, however, does not have any bias either way.”

Having worked on a number of projects similar to yours, an external expert also brings experience and perspective, helping you avoid common pitfalls and better define your needs.

How to draft your request for proposal

A good RFP needs to contain, at a minimum, certain key information. Here is what you should include to ensure you receive tailored proposals that meet your needs.

Project overview

Briefly describe the purpose of the automation project, its goals and the desired outcomes. Explain how the project aligns with your strategic plan and what you need it to accomplish for your business in the long term. By knowing these parameters, a vendor will be able to craft a bid that will maximize value and may suggest options you had not considered.

Technical requirements

Write down your needs. Specify any required technical specifications, including hardware, software and system compatibility. Highlight any standards, regulations, or certifications (e.g., CSA norms) that must be met. Beware of scope creep. “This is often where software projects go sideways,” explains Van der Poel. “The more you see, the more you want. Be specific about your needs, and carefully consider what’s truly essential versus nice-to-haves. Unnecessary additions can drive costs up by tens of thousands of dollars.”

Warranty, support and maintenance

Issues, bugs, and maintenance challenges are inevitable, but planning for them can ease the process. Clearly outline your expectations for ongoing maintenance, support, and troubleshooting after implementation. While software typically comes as-is, custom solutions may offer opportunities for post-launch assistance. For equipment, be sure to inquire about potential delays in sourcing replacement parts and the vendor’s response time for addressing these issues.

Project timeline

Provide a clear start date, expected completion date, and any deadlines for proposal submissions. “While the timeline will ultimately depend on the integrator’s capacity to deliver, they must adhere to the schedule they propose to ensure timely project delivery,” says Bombardier. Consider having predefined follow-up for milestones to ensure timely project delivery and accountability.

Training

Indicate whether the vendor is expected to provide training, both for your maintenance team and for the employees who will use the new software or equipment. In the end, the success of your automation project comes down to the successful adoption of your new tool—not only its integration. Training will help your teams make the successful transition from the old tools and processes to the new ones.

Budget

Indicate the budget range and clarify if the budget includes both initial costs and ongoing support/maintenance.

How to navigate legal considerations

Certain projects, such as those involving the development of custom software, can come with a tangle of complex legal questions.

“For instance, some companies may set terms that grant them ownership of the intellectual property they create for you, essentially reserving the right to offer those same solutions to other clients,” warns Van der Poel. “This is a big no-no, a major red flag.”

Legal issues in automation projects can be sensitive and tricky. To avoid potential pitfalls, it’s essential to consult with legal professionals who can thoroughly review the terms and conditions of the proposals you receive after sending out your RFP. Their expertise will help you navigate these complexities and safeguard your business interests.

Next step

Download our RFP template for equipment purchases to help attract bids that meet your goals.