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.
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.
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:
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:
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.
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:
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.
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.
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:
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.
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.
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?”
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.
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.
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:
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.
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:
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.
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.
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.