Request for information (RFI) is a prevalent business practice in the procurement industry. It provides a succinct way to gather information from various suppliers which can then be used to craft requests for proposals (RFPs) in the future.
RFI helps SMEs create vendor profiles, reduce the sourcing to contract life cycle, and enlightens procurement managers as to what solutions are available on the market.
Requests for information act as tools to gather information for sourcing teams, permitting them to build a reliable directory of suppliers.
In a world that’s been shaken by a global pandemic, when used strategically RFIs give their users a competitive advantage during these perilous times. They furnish procurement strategists with invaluable information that will assist in selecting suitable vendors.
What Does RFI Mean?
Definition:
The RFI definition according to TechTarget is:
“…a formal process for gathering information from potential suppliers of a good or service.”
To clarify this RFI definition, this means that RFI is a tactical method of acquiring general information from suppliers in order to solve a problem your business is facing.
Today, more than ever, procurement managers must work efficiently, automating as much of the procurement cycle as possible. Because industries and supply chains have been disrupted by COVID-19, procurement managers must be doubly wary of procuring resources as cost-effectively as possible.
With this in mind, we can better understand the purpose of RFI and the differences between RFI vs RFP.
What Is The Purpose Of RFI?
What is the purpose of RFI and why is it important to procurement specialists? Top German video marketing company BidBoxServices explains procurement concepts in simple terms in this compelling video which gives an overview of RFI and its purpose.
In a nutshell, the main objectives of an RFI include:
· Provision of information regarding the products or services offered by a vendor
· Obtaining information about the vendors’ capabilities (without going into too much detail)
· Getting knowledge that explains the vendors’ particular business strategies
· Presenting potential solutions to problems the inquiring business is currently facing
· Setting the stage for comparing various suppliers and their offers
How To Write A Thorough RFI Document
Well, now that you have a good grasp of the RFI definition and the purpose of RFI, you might be asking, “How do I write a good RFI?”
We’re glad you asked.
There are two ways to proceed from here. You can either write your own RFI documents or opt for an automated RFI template.
The best procurement managers understand the value of time and prefer leveraging automated RFI templates.
That’s why we are going to give you 3 great reasons why you should use ProcurePort RFI templates. These templates can of course be tweaked to suit your various procurement campaigns.
First, though, we are going to explain the difference between RFI vs RFP.
The Differences Between RFI and RFP
There are a lot of terms that get thrown around in the procurement industry. RFI, RFP, RFQ, IFB, LOI, PO to name a few. These can all be very confusing for most and subsequently used incorrectly.
RFI as seen above is a process that involves presenting a series of questions to suppliers in order to obtain information.
Whereas request for proposal (RFP) is a follow-up step in the sourcing life cycle when you are now interested and ready to evaluate in greater depth the service/product offerings of a vendor.
The RFP document asks specific questions regarding services, products, and the vendor’s business that require detailed answers from suppliers.
This document is more formal and direct, unlike the RFI which mainly asks generalized questions whose aim is to educate and inform sourcing teams.
Where the RFI tends to be the initial contact document sent to vendors, the RFP is the follow-up.
Now, with a clear understanding of each document, how and when it is used, we can explore why you should leverage RFI templates in your sourcing process.
3 Reasons to Use RFI Templates
ProcurePort RFI templates offer users several benefits: security, automation, speed, and trackable metrics.
(i) Security
With a hack being attempted every 39 seconds, online security is paramount for every organization. So, knowing that your internal and external communication channels are well-protected in a Tier IV data center that is SSAE 16 Type II compliant will give you peace of mind.
(ii) Speed
What if we told you that you could cut your RFI and RFQ process time by up to 90%? Yes, boost efficiency and reduce costs with these timely RFI templates. In addition, you can also monitor vendor activity in real-time.
(iii) Automation
Say goodbye to the manual collection of supplier information with ProcurePort’s sophisticated RFx automated templates. Gather data from multiple sources for any size project. With inbuilt supplier comparison technology, arrive at decisions faster.
Conclusion
RFI provides sourcing and procurement managers with the information they need to solve problems, choose cost-effective products and services, and recruit suitable vendors. Not only is it a vital tool in your arsenal, but it greatly improves efficiency especially when dealing with a multitude of suppliers.
With RFI templates, you can streamline operations, broadcast to a lot more vendors, and get qualified leads in record time. So, don’t hesitate to invest in products that will make your job easier.
If you would like to discuss RFx software with a consultant, or to schedule a demo, contact us today.