Request for Proposal

Project Overview/Introduction

In this section, you’ll offer a fairly generic outline of the project’s:

• Goals and objectives

• Expectations

• Financial limitations or details

• KPIs

• Stakeholder information

• Anything else they should know

Proposal Guidelines

In this section, you’ll outline everything you want to know in response to your RFP. Sample questions
to ask include:

• Who would work on this project?

• What are your financial expectations?

• What experience do you have for similar projects?

Project Description and Requirements

In this section, you’ll communicate your full project expectations. Take the overview and flesh it out
even further. I.e. if you are contracting a website builder/graphic designer, do they need to create a
company logo as well?

Project Deliverables and Scope

This is where you outline the results you’d like to see from the project. You’ll also go into scope,
which means you’ll clarify how big of an undertaking this project is. Scope includes describing the
various phases of the project.

Timeline

In this section, you’ll give those who submit an idea of what the timeline will look like. Timelines can
include but are not limited to:

• Evaluation Window

• Selection Deadline

• Negotiation Deadline
• Deadline to Notify Bidders Not Selected

• Timeline for Project Completion

Other Requirements

If there is any vital information you have failed to mention in the previous sections, mention it here.

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Project Management Triangle

The project management triangle (called also the triple constraint, iron triangle and project triangle)
is a model of the constraints of project management.

The time constraint refers to the amount of time available to complete a project. The cost constraint
refers to the budgeted amount available for the project. The scope constraint refers to what must be
done to produce the project's end result. These three constraints are often competing constraints:
increased scope typically means increased time and increased cost, a tight time constraint could
mean increased costs and reduced scope, and a tight budget could mean increased time and
reduced scope.The quality of work is constrained by the project's budget, deadlines and scope
(features). The project manager can trade between constraints. Changes in one constraint
necessitate changes in others to compensate or quality will suffer.The discipline of project
management is about providing the tools and techniques that enable the project team (not just the
project manager) to organize their work to meet these constraints.

For example, a project can be completed faster by increasing budget or cutting scope. Similarly,
increasing scope may require equivalent increases in budget and schedule. Cutting budget without
adjusting schedule or scope will lead to lower quality.

Time

For analytical purposes, the time required to produce a deliverable is estimated using several
techniques. One method is to identify tasks needed to produce the deliverables documented in a
work breakdown structure or WBS. The work effort for each task is estimated and those estimates
are rolled up into the final deliverable estimate.

The tasks are also prioritized, dependencies between tasks are identified, and this information is
documented in a project schedule. The dependencies between the tasks can affect the length of the
overall project (dependency constrained), as can the availability of resources (resource constrained).
Time is different from all other resources and cost categories.

Using actual cost of previous, similar projects as the basis for estimating the cost of current project.

According to the Project Management Body of Knowledge (PMBOK) the Project Time Management
processes include:
Define Activities

Inputs: Management Plan, Scope Baseline, Enterprise environmental factors, Organizational process
assets

Tools: Decomposition, Rolling Wave Planning, Expert Judgment

Outputs: Activity list, Activity attributes, Milestone list

Activity sequencing

Inputs: Project Scope Statement, Activity List, Activity Attributes, Milestones List, Approved change
requests

Tools: Precedence Diagramming Method (PDM), Arrow Diagramming Method (ADM), Schedule
Network templates, dependency degeneration, applying leads and lags

Outputs: Project Schedule Network diagrams, Activity List Updates, Activity Attributes updates,
Request Changes

Activity resource estimating

Inputs: Enterprise Environmental factoring, Organizational process assets, Activity list, Activity
attributes, Resources Availability, Project Management Plan

Tools: Expert Judgment Collections, Alternative Analysis, Publishing estimating data, Project
management software implementation, Bottom up estimating

Outputs: Activity resource requirements, Activity attributes, Resource breakdown structure,

resource calendars, request change updates.

Activity duration estimating

Inputs: Enterprise environmental factors, organization process assets, Project scope statement,
activity list, activity attributes, activity resource requirements, resource calendars, project
management plan, risk register, activity cost estimates

Tools: Expert judgment collection, analogous estimating, parametric estimating, Bottom up

Estimation, Two-Point estimation, Three-point estimation, reserve analysis

Outputs: Activity duration estimates, activity attribute updates and estimates

Schedule development

Inputs: Organizational process assets, Project scope Statement, Activity list, Activity attributes,
project Schedule Network diagrams, Activity resource requirements, Resource calendars, Activity
duration estimates, project management plan, risk register

Tools: Schedule Network Analysis, Critical path method, schedule compression, what if scenario
analysis, resources leveling, critical chain method, project management software, applying
calendars, adjusting leads and lags, schedule model

Outputs: Project schedule, Schedule model data, schedule baseline, resource requirements update,
activity attributes, project calendar updates, request changes, project management plan updates,
schedule management plan updates
Schedule control

Inputs: Schedule management plan, schedule baseline, performance reports, approved change
requests

Tools: Progressive elaboration reporting, schedule change control system, performance

measurement, project management software, variance, analysis, schedule comparison bar charts

Outputs: Schedule model data updates, schedule baseline. performance measurement, requested
changes, recommended corrective actions, organizational process assets, activity list updates,
activity attribute updates, project management plan updates

Due to the complex nature of the 'Time' process group the project management credential PMI
Scheduling Professional (PMI-SP) was created.

Cost

To develop an approximation of a project cost depends on several variables including: resources,

work packages such as labor rates and mitigating or controlling influencing factors that create cost
variances. Tools used in cost are, risk management, cost contingency, cost escalation, and indirect
costs . But beyond this basic accounting approach to fixed and variable costs, the economic cost that
must be considered includes worker skill and productivity which is calculated using various project
cost estimate tools. This is important when companies hire temporary or contract employees or
outsource work.

Cost Process Areas

Cost Estimating is an approximation of the cost of all resources needed to complete activities.

Cost budgeting aggregating the estimated costs of resources, work packages and activities to
establish a cost baseline.

Cost Control – factors that create cost fluctuation and variance can be influenced and controlled
using various cost management tools.

Project Management Cost Estimating Tools[14]

Analogous Estimating: Using the cost of similar project to determine the cost of the current project

Determining Resource Cost rates: The cost of goods and labor by unit gathered through estimates or
estimation.

Bottom Up estimating: Using the lowest level of work package detail and summarizing the cost
associated with it. Then rolling it up to a higher level aimed and calculating the entire cost of the
project.

Parametric Estimating: Measuring the statistical relationship between historical data and other
variable or flow.

Vendor Bid Analysis: taking the average of several bids given by vendors for the project.

Reserve Analysis: Aggregate the cost of each activity on the network path then add a contingency or
reserve to the end result of the analysis by a factor determined by the project manager.
Cost of Quality Analysis: Estimating the cost at the highest quality for each activity.

Project management software can be used to calculate the cost variances for a project.

Scope

Requirements specified to achieve the end result. The overall definition of what the project is
supposed to accomplish, and a specific description of what the end result should be or accomplish. A
major component of scope is the quality of the final product. The amount of time put into individual
tasks determines the overall quality of the project. Some tasks may require a given amount of time
to complete adequately, but given more time could be completed exceptionally. Over the course of
a large project, quality can have a significant impact on time and cost (or vice versa).

Together, these three constraints have given rise to the phrase "On Time, On Spec, On Budget." In
this case, the term "scope" is substituted with "spec(ification)."

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Project Lifecycle

The project management life cycle is usually broken down into four phases: initiation, planning,
execution, and closure. These phases make up the path that takes your project from the beginning
to the end

Steps for the project initiation phase may include the following:

Undertaking a feasibility study: Identify the primary problem your project will solve and whether
your project will deliver a solution to that problem

Identifying scope: Define the depth and breadth of the project

Identifying deliverables: Define the product or service to provide

Identifying project stakeholders: Figure out whom the project affects and what their needs may be

Developing a business case: Use the above criteria to compare the potential costs and benefits for
the project to determine if it moves forward

Developing a statement of work: Document the project’s objectives, scope, and deliverables that
you have identified previously as a working agreement between the project owner and those
working on the project

Steps for the project planning phase may include the following:

Creating a project plan: Identify the project timeline, including the phases of the project, the tasks to
be performed, and possible constraints

Creating workflow diagrams: Visualize your processes using swimlanes to make sure team members
clearly understand their role in a project

Estimating budget and creating a financial plan: Use cost estimates to determine how much to spend
on the project to get the maximum return on investment

Gathering resources: Build your functional team from internal and external talent pools while
making sure everyone has the necessary tools (software, hardware, etc.) to complete their tasks
Anticipating risks and potential quality roadblocks: Identify issues that may cause your project to
stall while planning to mitigate those risks and maintain the project’s quality and timeline

Holding a project kickoff meeting: Bring your team on board and outline the project so they can
quickly get to work

Steps for the project execution phase may include the following:

Creating tasks and organizing workflows: Assign granular aspects of the projects to the appropriate
team members, making sure team members are not overworked

Briefing team members on tasks: Explain tasks to team members, providing necessary guidance on
how they should be completed, and organizing process-related training if necessary

Communicating with team members, clients, and upper management: Provide updates to project
stakeholders at all levels

Monitoring quality of work: Ensure that team members are meeting their time and quality goals for
tasks

Managing budget: Monitor spending and keeping the project on track in terms of assets and
resources

Steps for the project closure phase may include the following:

Analyzing project performance: Determine whether the project's goals were met (tasks completed,
on time and on budget) and the initial problem solved using a prepared checklist.

Analyzing team performance: Evaluate how team members performed, including whether they met
their goals along with timeliness and quality of work

Documenting project closure: Make sure that all aspects of the project are completed with no loose
ends remaining and providing reports to key stakeholders

Conducting post-implementation reviews: Conduct a final analysis of the project, taking into account
lessons learned for similar projects in the future

Accounting for used and unused budget: Allocate remaining resources for future projects

Pricing

Time and material (T&M)

It presupposes billing clients for actual work scope based on hourly rates of labor. Customers are
charged for the amount of hours spent on a specific project, plus costs of materials. The main
advantage of T&M model is flexibility and opportunity to adjust requirements, shift directions,
replace features, and involve users to get the very product.

When to use T&M price contract:

Long-term projects with dynamic requirements;

Project scope is not yet fully known;

You want the flexibility to modify the scope or vary the workloads.
Advantages:

Flexibility. Unit-price contracts allow businesses to modify the volume of work, revise materials or
designs, shift the focus or change features following the project implementation.

Dynamic work scope is one of the key features within larger projects. There can be a general goal
that should be achieved, however knowing how it’ll be reached is not that important beforehand.
Often for startups and mid-sized companies, it is better to make decisions in the process, evolving a
strategy and building custom software simultaneously. Such approach underlies Agile methodology.

Better timing. Avoiding fixed-price bidding process helps to save time and start immediately.
Moreover, blended rates allow you to see how much time the team spends on each feature and
commit, and so motivate it to work more efficiently.

Disadvantages:

Low budgeting control is the main disadvantage of a T&M contract. The overall cost can go far
beyond the expected budget.

Deep involvement is required from you to make sure that the team is delivering toward the
approved scope and within the correct amount of hours.

The fixed-price agreement

Is a single-sum contract where a service provider is accountable for completing the project within
the agreed sum set out in the bond. It can be an effective choice in those cases when requirements,
specifications, and rates are highly predictable, elsewise the cost will be anything but constant. A
client should be able to share his clear vision of the product with developers to ensure appropriate
final results.

When to use a fixed price contract:

Clear requirements and determined deadlines;

Limited or fixed budget;

MVPs;

Small projects with the limited project scope.

Advantages

Predictability is the core factor that any entrepreneur seeks for in business. Company strategy
usually requires clear deadlines and figures to be transferred to the budget. Planning expenses for
1–3 months ahead can provide you with exact figures. However, if product development will last for
4 months and more, it is only natural that you can hardly foresee overall outlays and in such cases
other price models are advisable.

Transparency. With specified requirements, fixed budget and pre-arranged deadlines — there won’t
be any surprises. Regular project management interaction with the contractor ensures scope
compliance and protects margins.

Ease of management. Payments to the service provider are mainly based on a percentage of work
performed. Such workflow requires little involvement since expectations are transparent and
predictable.
Disadvantages:

Lack of flexibility is the major weak point of fixed-fee agreement. As a customer, you are responsible
for any emergent changes that you’ve initialized or those ones that are beyond the vendor’s
competence.

Less accountability can be referred to as both pros and cons, depending upon each particular case.
Such an approach doesn’t comprise regular reports and interactions between the customer and
team. All the management is mainly carried out by the team member, so you don’t have to allocate
timeslots for deep project involvement. Nevertheless, it doesn’t mean that you’ll be in the dark
about the workflow.

SAAS Based pricing

Freemium

One of the most common models to price a SaaS product is Freemium. You let your customers use
your software for free offering them a basic set of features. In other words, you let your users see
what your service is capable of without making them pay for it. To go to the next level and get the
most experience of your SaaS they will need to upgrade to a paid plan. Freemium is not used as a
single pricing model on the market and is usually combined with Per Feature or Tiered Pricing (will
cover them further).

Zoom is a good example of a well-integrated Freemium pricing model. The most popular video and
audio communication SaaS platform is widely used not only because it has an awesome set of
features but also because it offers a Basic Personal Meeting plan. You can sign up for free and get
access to an unlimited number of 1 to 1 and group meetings on Zoom platform with additional video
conferencing features (screen sharing, recording). This plan is quite popular among single-users and
small teams.

Gains:

Usually, it costs a pretty penny to attract customers to a business. Freemium pricing model will help
you acquire leads faster and cut marketing costs.

You will build a big customer database. Collecting emails of Freemium users will help you further
interact with them, test your marketing funnels, and convert them to use your additional features or
sign up to one of your paid plans.

Awesome tools with useful free features become viral very fast among users. It nurtures word-of-
mouth marketing and PR.

Freemium plan is a viable playground to test your SaaS features on different buyer personas.

Losses:

Serving an unlimited number of freemium users can affect your financial, operational, and time
resources.

You may struggle to qualify your customers and establish the value of your service. What used to be
free at the beginning, hardly becomes paid in the future. People like freebies and will try to get the
most of them.
Flat Rate

It is a simple pricing model. You have one price for one product with the same features offered to all
of your customers. The only choice you give is to charge monthly or annually to use your SaaS
product.

One of our clients, Precog implements a Flat Rate pricing model. Precog is a data preparation
solution that simplifies the process of data analysis. It provides software for letting business teams,
as well as data engineers, access any data regardless of source, size, or structure and turn it into
analytics-ready tables in minutes. The customer is only offered to choose between Monthly or Yearly
subscription plan, no trials, no complex pricing structure.

Gains:

3Es - easy to communicate, easy to market, and easy to manage.

Communicating value. Choices are good but people sometimes struggle to make decisions. Flat rate
pricing offers one option and a clear end result for everyone.

Allocating marketing resources. You concentrate on one product and build clear funnels to promote
and sell it.

Managing revenue. You can automate all your financial operations and build an accurate financial
strategy.

Losses:

The Flat rate model limits the diversity of buyer personas you can attract. For example, if you price
your product for the enterprise market, that price might be too high for mid-sized businesses.

Upsell and scale is not your story. In other words, it deprives you of additional revenue streams and
decreases LTV (Lifetime Value), as your customer can overgrow your SaaS.

Acquisition becomes a lifetime battle. You will have to invest a lot in ads to find your audience.

Usage-Based

Usage-based Pricing Model is pretty clear and fair for your customers. They pay only for the volume
they use. An alternative name is “pay as you go”. It is like a regular utility bill with a counter but for
SaaS companies. You can charge for the number of transactions, requests, data used, scheduled
posts, issued invoices, calls, messages. It works well with Tiered and Freemium pricing models.

Usages Based pricing model was the best option for our good client TextMagic. It is an all-in-one text
messaging service that has been successfully helping small businesses around the world do mobile
marketing. They offer to create a free account and use all features. You only pay for the number of
outbound text messages (sent from personal or business email, virtual, or existing mobile number).
Inbound messages are free of charge. So by the end of the billing period, TextMagic customers only
pay their bills.

Gains:

A transparent financial model helps you avoid miscommunication with your clients and makes them
responsible for charges.
Price is not the key criterion for your customers. The price for usage is usually low. You can attract
your first clients pretty fast.

A wide audience. Usage-Based pricing fits all business sizes, as a result, your market share can be
pretty high from startups to huge corporations.

Losses:

Your business growth becomes highly dependent on your customers. The scale is only possible if
your clients’ business grows.

Unpredictable revenue. MRR (monthly recurring revenue) or ARR (annually recurring revenue) are
fluctuating metrics for your SaaS product. It will be difficult to forecast and manage them.

Feature-based

If you offer a wide range of features, then your best option would be to stick to the Feature-based
pricing model. You can combine this model with Tiered pricing and create multiple plans with a set
of features for different customers.

ActiveCampaign, a platform for marketing automation processes, email marketing, and customer
support, uses a Feature-based pricing model. Their customers can upgrade as they scale their
business or need additional features. Active Campaign also integrates user-based and usage-based
pricing models. You can choose the Lite plan for $9/mo (provided with a yearly subscription) and
send an unlimited number of emails (newsletters, forms), provide chat and email support to your
clients for 3 users. If you also need to communicate with your Facebook audience, to manage your
content and leads, to integrate other apps and grant access to a SaaS platform for more than 3
users, your better option is Plus plan which is $49/mo.

Gains:

Customers pay only for relevant functionality and can choose from clear offers. You build several
plans for businesses of different sizes (small, medium, big) and suggest choosing the one which fits
their needs.

When you have multiple predetermined plans you can divide your audience and adapt your
marketing and communication strategy to each of the groups.

Losses:

You will need to work with buyer personas meticulously to understand which features can be
combined together in a way that benefits their business at the different growth stages.

Customer acquisition is tightly bonded to your plans. If you don’t combine features in relevant plans
you won’t hit the target and lose the lead. It is obvious when a client can’t find what he needs,
he/she chooses your competitor.

Tiered

Tiered Pricing model combines all the possible features of your SaaS in predefined packages and
allows your customer to choose what better suits his or her needs. You create from two to five plans
at a specific price with a set of functions for each. With the Tiered Pricing model, you serve B2C
(business to customer) and B2B (business to business of different sizes). It is usually combined with
Freemium or Feature-Based Saas Pricing Models.
Zapier is an online tool that connects apps and atomizes repeated and time-consuming tasks. They
offer to choose among tiers that are developed for different types of customers (Starters,
Professionals, Teams, Companies). What is even more interesting, they combined the Tiered Pricing
model with Feature-based and Usage-based and Freemium.

Gains:

Increased market share (B2C and B2B) due to a bigger audience: individuals, small businesses, and
enterprises.

High Lifetime Value (LTV) because you can offer more useful features to your customers as they
scale. They will be loyal to your business, prolong their subscription, and do not consider shifting to
your competitor.

Qualified database of clients to upsell and interact with for further development and SaaS growth.

Losses:

You will need to spend a lot of financial and time resources forefront to run detailed research of
your targeted audience to carefully combine features in tiers.

Blended

The better you know your product the optimal pricing model you will be able to choose. For some
market players, it is difficult to fit all functionality into one pricing model. Therefore, they mix a few
models to sell their products to different people. With a blended pricing model, gains are pretty
clear, but losses are great as well. You have to manage your Pricing as separate Products and engage
immensely in controlling and forecasting (if it is possible) your revenue streams.

Vimeo, a streaming platform, is hitting that road. They combine Feature-, Usage-, User-based,
Tiered, and Freemium pricing models to get the most of what they can offer to their clients. Despite
it is a bit unclear from their pricing on a website but you can try a plan for 30 days for free or start
with Vimeo Basic plan - Freemium pricing model. Then they offer different tiers (Plus, Pro, Business,
Premium) with predetermined sets of features for each package. We can see Tiered and Feature-
based pricing models combined here. Each of the plans also offers different storage to your business
size and number of users who can access the platform and work with videos. Pretty awesome!

Technical Marketing

The term “technical marketing” has two meanings, though they are often related. Classically,
technical marketing is any method of marketing focused on the specifications and key features of a
product, designed to appeal to customers with a base technological understanding of the product.
However, technical marketing has also grown to encompass any use of modern technology as a
marketing tool.

Adobe TV is a great example of technical marketing in both senses of the term. It is a tool Adobe
Systems uses to communicate the features and appeal of complex software to customers who
already use such software on a regular basis. The tutorials on Adobe TV assume a certain degree of
comfort with computer technology and even the specific program being featured. Rather than
simply raising awareness about a program and making it seem attractive to those who know nothing
about it, Adobe TV increases the appeal of a program by teaching users how to implement its more
advanced features
Adobe TV also uses modern technology such as embedded Internet video as a marketing tool. Again,
this is intended to reach customers who already have a certain degree of comfort with the
technology Adobe is marketing. Instead of using media like books, home video, or television to
deliver tutorials, Adobe TV’s video tutorials reach customers who are certain to be literate about
Internet technology.

Who implements technical marketing campaigns?

Any company that has a technically complex product or whose customers tend to be technically
educated people can benefit from technical marketing.

If, for instance, a company wants to market a line of advanced factory equipment, its customers are
likely to already know about the technical aspects of factory equipment in general. The company
should create marketing materials that outline the technical specifications of the equipment, such as
how fast the equipment works, what temperatures it can safely handle, and how much electricity it
consumes every hour. These aspects are more important to the company’s customers than simple
branding.

A company doesn’t necessarily need to appeal exclusively to highly informed customers to benefit
from technical marketing. Car companies often advertise vehicle specifications in mass marketing
materials like television commercials, though they can’t be certain their audience truly understands
what the specs mean. This includes simple concepts like how many miles per gallon of gas the
vehicle gets, the horsepower of its engine, and the particular kind of brakes it uses. These
specifications might sound impressive even to an audience with little knowledge of car engineering.

Creating a technical marketing plan

Before a technical marketing campaign begins, everyone on a marketing team must work closely
with the product’s developers to acquire a thorough understanding of a product or service.

For example, if an electronics company wanted to begin marketing a new, high-end digital video
camera intended for filmmaking, the marketing team should spend time with the people at the
company who designed, built, and tested the camera to discover what the camera can do and what
its technical specifications mean. This allows marketing professionals to create effective advertising
materials for people like movie directors, cinematographers, and videographers who already
understand digital photography.

While the marketing team is learning about the product, they should also conduct market research
to determine who is most likely to be interested in the product, and what is most important about it
to them. The team at the electronics company might read consumer data and conduct surveys to
find out what kinds of people are likely to buy the new camera, and which specifications they value
the most in cameras.

Using market research data and knowledge they learn from the developers, a marketing team
creates advertising materials for their product and places them in strategic media channels. The
team at the electronics company could craft an advertisement outlining the camera’s specifications
to be placed in a film industry magazine, as well as create the camera’s product page on the
company website. Informational materials are highly effective in technical marketing, so the
electronics company should also create valuable content like blog posts and videos related to the
camera that will link to the product web page
Throughout the advertising campaign, the marketing team should have a method to collect
customer feedback about the product. Adjustments to the campaign should be made using the
feedback collected. (See also B2C Marketing)