As a Procurement Service listed on our marketing materials and website, the most common query we receive from clients reviewing our services is, what is RFx? To which we reply, “RFx does not stand for anything specifically; as the RF stands for “Request For” and the x is just a placeholder for I, P, B, T and / or Q i.e;
- Request for Information (RFI),
- Request for Proposal (RFP),
- Request for Bid (RFB) (or sometimes Request for Price (RFP)),
- Request for Tender (RFT), and /or
- Request for Quote (RFQ).
We clarify that the RFI / RFP / RFQ are the most common Tendering processes used in the strategic sourcing and procurement cycles, while noting that the RFx process is difficult to define as it can range from a simple one-time RFQ to a complex multi-stage RFI / RFP / RFQ process, depending on the needs of the client. Choosing the most appropriate RFx process, is an important task which depends on the objectives of the sourcing event, the completeness of the product/service requirements, the number of suppliers involved, the level of competition between such suppliers, the inherent risk in the sourcing effort, and projected cost savings or cost avoidance opportunities.
A typical Arvo sourcing event will consist of the 3 processes, where;
- The RFI is used to collect all stakeholder requirements, determine market interest before pre-qualifying interested and appropriate suppliers,
- The RFP is used to gather supplier offers in relation to their products, services, expertise and solutions, before
- The RFQ is used for suppliers to finalise their commercials proposals and quotations, leading to a final award decision (while even considering the use of Reverse Auctions at this stage)
Undoubtedly numerous benefits exist to regularly and correctly Tender (RFx) such spends but the 2 most important benefits of all sourcing events are to recognise that;
- Requests for either information or proposals can provide valuable insight into the current market situation, and
- Cost savings or cost avoidance opportunities exist throughout the process.
Finally, numerous platforms exist to expedite the Tender (or eTender) process so as to provide assistance with communications, pre-prepared templates, workflow management, access control and analytic tools. When you require assistance with your next Sourcing Challenge, be it a simple one-time RFQ to a complex multi-stage RFI / RFP / RFQ process, contact us to discuss further.