In today’s globalized economy, procurement experts agree that a major factor in company survival is the ability to assess and improve activity at the global level. That means making connections that defy traditional geographical and communications barriers. Finding global business partners in a market pool the size of the entire world can be difficult. Contracting experts such as EC Magazine go so far as to apply Game Theory in search of the best way to manage modern tendering procedures.
Looking for the right supplier is a process, but technology is finally catching up. Electronic tendering or e-Tendering is software that helps organizations implement common sense and back-end machine learning to specify what kind of product, services, suppliers, and relationship will match their needs as a buyer. It’s about using cutting-edge technology to narrow the field. It’s about finding the right fit. Here is a beginner’s guide to e-Tendering as a solution for getting there faster.
e-RFX and e-Tendering: What is the Difference?
The term RFX means ‘Request for…X’. The X is a place-holder for the variable in the main four types of request common in the procurement industry: Request for Proposal (RFP), Request for Information (RFI), Request for Quote (RFQ), and Request for Bid (RFB). RFX works as an acronym for any kind of request that buyers put out as feelers for vendors in their supply chain.
As mentioned, e-Tendering is the shorthand term for electronic tendering. It refers to any online-based or digital tendering process handled by software. e-RFX and e-Tendering are overlapping terms. They both refer to digital tendering processes, where the e- explicitly calls out digital versions. e-Tendering includes processes from on-premise applications as well as the increasingly common cloud environment. At today’s level of pervasive digital migration, both terms have evolved to refer to digital solutions. e-RFX is more common in the United States while e-Tendering is widely used in foreign markets. For our purposes, they are interchangeable.
As mentioned, there is a right way and a wrong way to handle e-Tendering. The wrong way will only result in frustration. The wrong way will also cost your organization time and money. Ineffective e-Tendering is marked by a lack of detail, information asymmetry, misunderstandings, and poor results.
To understand the importance of e-Tendering/e-RFX, just look at where it falls in the procurement process. e-RFX is a pre-sales process. Tendering is a 3-step information exchange:
- The Buyer prepares detailed guidelines to convey what they are looking for
- The Buyer and Supplier connect and communicate on the same platform
- Supplier responds to e-RFX by submitting a bid that explains how they can meet the guidelines
After a successful match is made, the next step is for the buyer and supplier to move ahead with a contract. Contract management can also be handled digitally, but it is a separate stage in the procurement process. Pre-sales consultants that facilitate the e-RFX process are also technical experts in the user interface so they can mediate during all three steps above. It’s their job to ensure that the product offered by the supplier will meet the buyer’s ultimate requirements.
Finding the Right Fit
When we talk about good results, we mean getting contracts on the books quickly. By going digital, we need to be careful not to lose the clarity of traditional face-to-face negotiations. The purpose of electronic e-RFX is to make connections faster than the old-fashioned way and move ahead with business. The right fit comes from transparency.
Top Tendering Tips
According to Supply Chain Digital, the top tendering tips for suppliers include:
- keep promises
- start small
- realistic bidding
On the other side of the supply chain, e-Tendering offers huge benefits to buyers by following these tips in the digital setting. Using e-Tendering, buyers can uphold quality e-RFX. These applications facilitate your ability to do research, solidify your capabilities as the buyer, be open to small jobs, get a foot in the door, and stick with realistic requests. By leveraging technology to find tendering partners, upholding your end of the bidding process is simple.
Effective e-Tendering results in B2B and B2G contracts that result in a sustainable and winning partnership. When both parties have clear expectations and robust e-RFX software to navigate the process, the end results are almost effortless.
To find out if you are ready to digitize your e-RFX processes, request a demo of ProcurePort’s cloud-hosted e-Tendering solution today.