A well-conducted Pre-Qualification Questionnaire is a crucial step in the process of gathering information on potential tech partners. It helps to mitigate risks and to ensure that your business requirements are being met.
The Pre-Qualification phase is an important part of a procurement department’s supplier evaluation process and, regarding its advantages, should be conducted no matter whether a company uses an RFP or not. The insights gathered by means of a PQQ greatly increase the chance of choosing the perfect IT partner.
What is a pre-qualification questionnaire (PQQ)?
A Pre-Qualification Questionnaire, or a PQQ is used to analyse and understand the processes of a prospective supplier and thereby decide if the standards align with important norms in the buyer’s organisation. A PQQ helps to eliminate potential software development providers that do not meet business requirements. It is useful not only early in the process of searching for the best tech partner, but also as a means of checking compliance regularly as the collaboration progresses.
PQQ template in software development outsourcing – what to include?
There are some vital questions about core business areas that a Vendor Pre-Qualification Questionnaire should include in order to allow the buyer to benefit the most from using it. We recommend that a PQQ for software development cover the following:
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Basic company information
The information provided should confirm that the company is real and that it is legally allowed to operate. What you need are contact details, VAT/tax number, company registration number, ownership declaration, licenses needed for doing the specific work.
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Financial information
You want to collaborate with a company that is financially stable. What will help you determine that it is safe to start working with an organisation are financial statements in a desired currency, preferably from 3-5 years back. They should include information about profit, loss, assets, liabilities and equity. The potential partner may also provide bank references or financial audits, and you may want them to be analysed by your Finance Department to check for any red flags.
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Insurance
What is important in this area is to check the name of the insurance company and the scope of the general liability insurance – this will tell you what is and is not covered regarding the services that a potential supplier wants to provide you with.
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InfoSec
InfoSec stands for information security. Here a PQQ check should include questions about GDPR, data protection and processing, equipment used, processes and policies regulating access to buildings, passwords and anti-virus protection. Another important issue is to find out how the company makes sure that the above regulations are observed by its employees.
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Risk Management
Every company should have plans and procedures ready in case there is an emergency or a crisis. A PQQ should check that they exist and are regularly tested by your potential partner ensuring they are always adequate and up to date.
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Human Resources
HR policies in a company are important. Find out the information about background checks, recruitment, employee onboarding, training and development. Apart from this, communication channels in the company may be of your interest, especially between the management and employees.
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Subcontractors
After you asked about the employees of a company, you should also remember about the 3rd party employees. Find out to what extent the employee policies apply to subcontractors, how the company approaches their screening, management and their potential access to your data.
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ESG/CSR issues
This area should cover the questions about the ESG that are significant to your business. The examples of what you may ask about are environmental issues, charity, equality and inclusiveness, anti-bribery and anti-slavery guidelines.
Pre-qualification questionnaire template (PQQ) for software development outsourcing
Download our free, editable Pre-Qualification Questionnaire Template for Software Development Outsourcing and get a specific list of questions for each area described above. Our template is editable, because you may want to add some new questions to the list (feel free to adjust the questionnaire to your own needs) and send it out to your potential partners.
Checking software development providers – going beyond pqq
There is much more that you can do than only send out a Pre-Qualification Questionnaire.
To make the process of searching for the right partner more detailed and thorough, we recommend that you:
- use an RFP (Request for Proposal) – check out our editable RFP template,
- speak to the software development provider’s clients and ask for references,
- search the company website and social media, e.g., LinkedIn,
- check the company’s profile on Clutch,
- go to see a place of business in person and speak to people of all levels at the company’s premises,
- check the supplier’s work quality by asking to do a test task.
