The procurement industry is changing rapidly owing to the wide-spread adoption of new technologies.
Procurement officers are embracing this change because automation is allowing them to be more efficient.
An example of software that’s eased life for enterprises is eRFP.
But what is eRFP and how exactly does it work?
What Is eRFP?
eRFP is an acronym that stands for an electronic request for proposal.
Put another way, an eRFP is a cloud-based management solution designed to streamline the RFP process.
The Evolution Of eRFPs
Traditional requests for proposals or offline RFPs involved manual paperwork and had to be delivered to various stakeholders in person by the buyer.
This was of course laborious and time-consuming, not to mention inefficient, ineffective, and simply exhausting.
The RFPs allowed selected vendors to respond to the buyer with a proposal for particular contracts. It detailed the products and or services they could provide. It was a formal expression of interest.
In 1995, Plan Soft Corp, released the first-ever electronic request for proposal, a software that revolutionized procurement.
Today, companies like ProcurePort have developed more sophisticated and easier-to-use eRFP platforms that promise to complement your procurement efforts, saving you both time and money.
The Benefits of eRFPs
As their name suggests, eRFPs are electronic by nature, meaning they are online proposals that can be issued to selected vendors by buyers remotely.
This is by far their biggest benefit.
Secondly, they improve procurement efficiency in that templates are readily available and can be used as-is or customized quickly. There is no need for procurement teams to waste hours drafting RFPs from scratch.
eRFP software can also assist by providing a repository of questions to build your custom RFP documents.
How eRFP Works
Before addressing how eRFPs work, we must mention RFI vs RFP as these are terms that are often misunderstood.
RFI stands for request for information and usually precedes RFP. Vendors are shortlisted during this initial inquiry and only qualified suppliers make it to the RFP process.
There are five main steps within the RFP process:
· Project planning
· Drafting the eRFP
· Issuing the eRFP
· Reviewing proposals
· Awarding the contract
1. Project Planning
This first stage involves identifying the requirements, establishing the scope of what’s needed, and aligning with the business strategy.
The electronic request for proposal is being sent to vendors identified during the RFI process. A budget is put forth and a timeline.
Scoring criteria must also be provided and the review process established.
2. Drafting the eRFP
A well-drafted eRFP will have an introduction, statement of purpose, background information, scope of requirements, budget, project schedule, contract terms and conditions, RFP timeline, and review process and requirements for proposals.
3. Issuing the eRFP
Once the eRFP has been drafted it can be disseminated and distributed to the identified vendors.
The procurement team will have to coordinate responses and answer any questions.
Fortunately, if you are using a dedicated eRFP platform such as the one by ProcurePort, there is access to an integrated communication portal.
4. Reviewing Proposals
This stage involves receiving submissions and scoring the eRFPs. Finalists are selected, interviews conducted, and references checked out.
The best and final offers are then submitted for further review.
5. Contracts Awarded
After the final review, suitable vendors are chosen and contracts are awarded. Final negotiations take place and other bidders are notified of the outcome.
The procurement industry is changing quickly. For enterprises to succeed, they need to adapt to the changing landscape.
This is why CFOs and procurement teams must consider investing in eRFP software. Not only will doing this give you an edge over your competition, but it will assist you in streamlining your procurement efforts while mitigating spend.
To discuss your enterprise needs with a consultant or to schedule a demo of our RFx procurement solutions contact us today.