What does DDQ mean, and how does it differ from an RFP?

Learn what DDQ means and how the differ to RFPs in procurement. Understand their roles in risk assessment and vendor selection during the buying process.

Jasper Cooper

September 22, 2023

What is a Due Diligence Questionnaire (DDQ)?

In the procurement and vendor risk management ecosystem, multiple acronyms float around, such as RFP, RFI, and RFQ. Among these, the "DDQ", meaning the Due Diligence Questionnaire (DDQ), is significant for its role in risk assessment and validation.

DDQ Meaning

DDQ stands for Due Dilligence Questionnaire, but what does that mean?

A Due Dilligence Questionnaire, is a type of questionnaire that buyers/prospects use to ensure the vendors they work with meet their internal policies as well as external compliance frameworks. If you're selling your products/services to Enterprises or Governments, particularly in the financial services industry, you will come across them a lot. Here we dive into what they are and how you can be successful in responding to one.

What is a DDQ?

DDQs vary in scope and length, some as small as 10 questions with others ranging into the hundreds. Most DDQs are around 50 questions covering key topics including:

  • Company Information

  • Financial Information

  • Legal Information

  • Customer Case Studies & Past Performance

  • GDPR Compliance (EU)

  • ISO27001 & SOC2 Compliance (International)

  • Modern Slavery Compliance (UK, AU, NZ)

  • Environmental Sustainability and Governance (ESG)

They are commonly completed in Word, Excel, PDF or sometimes on Web Portals.

The Alphabet Soup of Procurement: RFP, RFI, RFQ, and DDQ.

The DDQ usually comes into play after the RFP process and sometimes after the RFI and RFQ. A DDQ is vital for risk assessment, diving into granular details like financial health, security protocols, and compliance history. This is where terms like 'vendor risk management,' 'strategic sourcing,' and 'asset management' really come into focus.

What's the Role of a DDQ in Different Sectors?

Vendor risk management is paramount in a strategic sourcing context. DDQ is an exhaustive checklist that helps organizations ensure that their vendors meet compliance and security standards. Automation software plays a significant role in streamlining this process.

Technology Sector DDQs: In the Technology sector, DDQs are used to assess vendors offering automation software. The focus is on central data security, functional capabilities, and integration possibilities.

Financial Sector DDQs: In finance, customers generally want to see the last three years of financial statements along with other key items like the AUM or Assets Under Management and past performance across different investment portfolios.

Strategic Sourcing and Consulting DDQs: In strategic sourcing, DDQs help consulting firms evaluate potential vendors based on various parameters like technology, knowledge, and expertise, thereby aligning vendor capabilities with project needs.

Benefits of DDQs for the Buyer:

  • Knowledge-based Decisions: It provides the knowledge base for making informed decisions, a critical aspect in strategic sourcing.

  • Evaluation and Assessment: Offers an in-depth evaluation and risk assessment of potential vendors or partners.

  • Enhanced Security: By focusing on security questionnaires within the DDQ, organizations can ensure data protection and compliance with legal norms.

What is the difference between DDQ and RFP?

At first, I was a bit confused about the differences between the two, but with experience, I have come to understand their distinct roles and implications in the procurement process.

Let's start with the RFP, or Request for Proposal. Organizations use this formal document to seek proposals from potential vendors or suppliers. It is usually issued by the buyer, outlining their requirements, expectations, and evaluation criteria. The RFP provides detailed information about the project, including scope, timeline, budget, and deliverables. It gives companies an opportunity to showcase their capabilities and present a tailored solution that meets the buyer's needs.

On the other hand, the DDQ, or Due Diligence Questionnaire, is a comprehensive set of questions that organizations use to assess the financial stability, legal compliance, and overall suitability of a potential vendor or supplier. It helps the buyer to evaluate the risk associated with partnering with a particular company. The DDQ covers various areas, such as company background, financial performance, references, certifications, policies, and procedures. By completing the DDQ, software companies provide evidence of their credibility, reliability, and ability to deliver on their promises.

While the RFP focuses on the buyer's specific project requirements, the DDQ delves deeper into the vendor's capabilities and credibility. The RFP aims to gather proposals that address the buyer's needs, while the DDQ aims to assess the vendor's overall suitability and risk factors. In other words, the RFP is about finding the right solution, while the DDQ is about finding the right partner.

What are RFIs, RFPs and RFQs?

Request for Information (RFI)

RFI or Request for Information serves as a preliminary step even before the RFP. It aims to gather general information about vendors and their capabilities. This step is particularly useful for consulting firms and technology companies aiming to narrow down potential partners.

Request for Proposal (RFP)

The RFP (Request for Proposal) is the initial step in the procurement process. Organizations issue an RFP to solicit vendor proposals for specific products or services. The focus is often on project scope, methodology, and pricing.

Request for Quotation (RFQ)

RFQ is used when the requirements are very well-defined and the organization wants to receive quotes. It is commonly used in sectors like manufacturing, where specifications can be extremely detailed.

Automating DDQs with AI

Recently, it became possible to automate DDQs with AI. has been leveraged by organisations who are starting to do DDQs for the first time all the way to organisations that complete hundreds per year.

By using your previous DDQ responses, can automatically respond to future DDQs in seconds rather then hours and export the DDQ back into the customers preferred format (including working in Web Portals).


In conclusion, both RFPs and DDQs play crucial roles in the procurement process for software companies. While the RFP allows organizations to find the right solution for their project, the DDQ helps assess potential vendors' overall suitability and risk factors. Companies can increase their chances of securing partnerships and delivering high-quality solutions by understanding and effectively addressing these two documents.

Learn More

See how AI can help you

Find 30 minutes to learn more about and how it could work for you.