Getting accurate procurement bids is difficult. When it comes to business transactions, it’s normal for an organization to get tunnel vision. People are so familiar with their jobs that they have a hard time explaining to outsiders what they need. This can lead to flaws in the procurement process from the outset. How does RFx software from an e-Procurement platform help you to best communicate procurement needs?
Know What You Need
Imagine a company that needs to get a lot of people from point A to point B quickly. The procurement team sees the needs listed as “fast vehicle” and “large transport vehicle”. Thus put out a request and receive quotes from two suppliers for a Ferrari sports car and a city bus. Two contracts are drawn up and both purchases are made. The resulting process of moving people with those vehicles is likely to be incredibly inefficient.
If the need had been well-understood, perhaps an 8-seater van could have solved the problem best. It may not be the fastest or fit the most people, but it can efficiently carry a reasonable amount of people at a reasonable speed. The efficiency of procurement outcomes all depends on how the need is communicated, how clear the specifications are, and which suppliers respond as a result.
With serious potential for information asymmetry, poor procurement decisions result in a whole lot of wasted time and money. If procurement requests were easy, we would never have invented software specifically to handle RFQ-RFP-RFI-RFB tasks. Thankfully, we do have technology solutions that streamline the process.
How RFx Software Can Help
As mentioned in our Beginner’s Guide to e-Tendering, solutions that assist with RFQ, RFP, RFI, and RFB are referred to by the umbrella term RFx software. RFx means ‘Request for…X’ where the X covers Request for Proposal (RFP), Request for Information (RFI), Request for Quote (RFQ), and Request for Bid (RFB).
Before you can put out an RFx, it’s important to know what you need. RFx software helps organizations to break down the process. It delineates which type of RFx to use, the industry-standard inclusion items, and solicits the right information to produce well-researched and well-articulated requests.
Technology helps to structure the process, but the real content of your RFx comes from your team. Your procurement team is the best source of knowledge for communicating e-Procurement needs. Your employees and supervisors form the procurement department are the ones who work with suppliers day in and day out. They know what is working for the organization and where the weaknesses are.
Schedule a strategic planning meeting with key players on your team. Ask them to come prepared with input from every team member. With their input, you can outline the type of RFx software that will fit best. You will be able to distinguish between “must-haves” and dream functionality that can be decided by the budget.
The real magic of e-Procurement is transparency. RFx software gives you the power to be clear in every request issued. The clearer you are, the better matches you will receive in the form of bids, quotes, and proposals. Once you have the right e-Procurement solution for RFx, you will convey clearly to suppliers what you are looking for every time.
Don’t make the mistake of limiting yourself based on what your procurement team currently handles. Think bigger. Consider what your team wishes they could accomplish. Use their goals as a jumping-off point to assess what an ideal e-Procurement solution looks like. Remember that benefits like centralized recordkeeping, digitized contract management, remote access, and big data will make your procurement team more efficient almost immediately. Plan to leverage this new availability to achieve more.
RFx = Quick Results
With RFx software, looking for a supplier yields quick results. With clear communication, the resulting bids are an accurate match for your organization’s needs. The following information is organized automatically by the tool:
- company name
- starting bid
- bidding date/time
- bid amount
- transformed bid
- ranking of bids that meet your needs
With this data compiled in a way that is easy to compare, it makes the next steps simple. The bids come in, you choose a supplier, and it’s a smooth few steps to get contracts signed and move ahead with business. Thanks to RFx software, your new procurement partnership is in place.
To learn more about other e-Procurement solutions that can help your organization to run more efficiently, read our weekly posts on technology tools and industry news at the ProcurePort blog.