E-procurement solutions allow users to run competitive tendering with custom RFIs, RFQs and RFPs for the products or services you require, and float these through an e-tender for your suppliers to submit their offers against.
While they may sound similar, a request for quotation (RFQ), a request for proposal (RFP) and a request for information (RFI) all have different functions in the procurement process and serve different purposes.
In order to run a successful and effective procurement process, you must understand not only the different definitions, but also when to use what. Often all three are used in combination to obtain relevant information from potential suppliers and identify and purchase specific goods and services that the company needs.
An RFI is a requisition document used in preliminary scoping and sourcing studies to collect information from suppliers to better understand the marketplace. Based on the information collected by an RFI, a detailed and defined product or service request can be created. An RFI gets converted into either an RFQ or an RFP.
An RFI is typically used under 3 circumstances:
If you are a company sourcing a specific product or service and you need an overview of offerings and costs from many or a few different suppliers, you may need to issue an RFP.
An RFP is a document that asks vendors to submit a detailed proposal with the goal of procuring a high complexity product or service where pricing is dependent on scope, timelines, quality, availability, and complexity.
An RFP is customizable and enables the user to specify questions that the supplier must answer to submit a bid. In fact, an RFP should be very specific in explaining what the company needs and any specific requirements you have. Suppliers must have enough information to propose a valid proposal.
RFPs are typically used to request detailed commercial and technical offers for the procurement of services or works, which involve a combination of goods and services such as the installation, configuration and maintenance of these goods.
An RFQ is a formal request created by the procurement team, either by using an approved purchase requisition from the end user or through an other demand request for the sourcing and purchase of physical goods or services with clearly defined parameters.
An RFQ is used primarily to request commercial terms and parameters from suppliers against a clearly specified or commoditized product. It lists the products being requested along with their quantities and any other specific terms, including intimation of the type of payment and delivery terms that the user would like to receive.
Unlike an RFP, which asks suppliers to come up with solutions based on a company's needs, an RFQ lists predetermined specifications with a focus on price.
A request for information (RFI) helps gather information on what's out there to help you determine what your company needs and what you need to do next to get it, or to help you determine what solution would solve your problem.
A request for proposal (RFP) is used when you need an overview of the different solutions that can solve your problem and evaluate proposed solutions before making a decision. Provides an overview of what different vendors have to offer and their prices, allowing a clear comparison.
Use a request for quotation (RFQ) when you know exactly what your company needs but need to evaluate the financial aspects to make a final decision.
Each document is a different tool that can be used independently or in combination to help you get the perfect vendor to provide what you need. Regardless of what requisitioning format you use, Proqura can help.