Understanding the nuanced differences between similar terms in an industry is essential to creating effective processes and procedures. In many instances, especially in procurement, there are a range of terms and acronyms with similar meanings – but significant differences. The RFI vs RFP processes, for example, are similar, but remain distinct from one another.
Getting to Know RFI vs RFP
The acronyms stand for slightly different things. An RFI is a request for information, while an RFP is a request for proposal. Breaking down the two terms it’s immediately evident that they’re both tools in the ‘request’ process that procurement teams use. However, each is a tool distinct from the other, much like a phillips head screwdriver differs from a flathead screwdriver.
The Request For Information
The request for information process is normally the step that a company or procurement team takes prior to a request for proposal. As such, the RFI is used as a tool to garner information from potential suppliers.
This information then allows the procurement department to filter out their vendor-options, customizing the vendors that make the most sense for that individual organization to work with. Through vetting the suppliers and vendors with an RFI, an organization is only left with the highest quality vendors that will offer the best rates.
Streamlining with RFI Templates
This process is sometimes referred to as short-listing, and helps companies create and maintain active lists of high-quality vendors that match their needs and standards.
The request for information can be a very powerful tool – yet, it would be extremely inefficient to have to create custom RFI’s for each and every contract that your procurement team was looking to fulfil through a vendor. Luckily, with software like what’s offered at ProcurePort, your team can build RFI templates that streamline the RFI process, and boost your team’s efficiency.
The Request For Proposal
Similar to the RFI, the request for proposal can either stem from an RFI, or originate the process. This is dependent entirely on the procurement team and company preference.
While the request for proposal does contain some overlapping information that would be gathered from the RFI; the two processes do serve distinctly different functions.
While the request for information is mainly seeking information about the vendor, the request for proposal is looking for the vendor to respond with a proposal to a specific contract. This doesn’t guarantee the contract, and doesn’t act as a purchase; but it does give the company further insight into the vendors and suppliers that they’re considering.
This progresses the companies ability to sift through vendors and suppliers and make sure that they award the contract to the supplier best suited.
Benefits of Enhancing the RFP Process
Because the RFP process involves soliciting a proposal from a potential vendor, there are tangible and palpable benefits to enhancing the RFP process as much as possible.
Taking a moment to consider the vendors perspective – an RFP is, again, not a guarantee of the contract. While this is beneficial to the procurement team; the supplier has to spend valuable time and energy developing their response to the RFP, without any guarantee that they’ll see a return on that labor and time.
Understanding the supplier side provides valuable insight to the procurement team that can be used to help craft a more vendor-friendly RFP process.
One of the main benefits from developing a vendor-friendly RFP process is that it yields stronger supplier relationships. These relationships will help in developing secure and stable supply chains, while simultaneously building supplier relationships that span contract after contract and can last for years or even decades.
Wrapping Up the Request Process
In the request process there are both RFI’s (request for information) and RFP’s (request for proposal). While the two terms are similar, their functions are very distinct from one another.
Understanding the best practices and industry standards that apply to your organization regarding RFI’s and RFP’s will help you, and your procurement team, in building a customized and efficient request process that’s specific for your business.
For the most up to date procurement information and knowledge, visit the premier procurement resource hub, ProcurePort. ProcurePort has everything you need to optimize your procurement department from helpful guides, the latest trends, and sophisticated software solutions.
