Can RFx software really streamline the procurement process?
The short answer?
Yes, it can.
Procurement technologies including RFx software have become such an integral part of enterprise operations that the market value of procurement software is projected to reach $9.6 billion by 2026.
This proliferation of procurement software has made it incredibly easier to source and purchase raw materials and services.
Requesting information from vendors – even global suppliers – has been simplified immensely.
But before we consider the ways in which RFx software has improved the RFx process let’s find out what RFx software is exactly.
What is RFx Software?
Firstly, RFx is an acronym widely used by procurement specialists to reference the collective terms:
· Request for Proposal (RFP)
· Request for Information (RFI)
· Request for Quote (RFQ)
· Request for Bid (RFB)
RFx software is an enterprise program that enables procurement teams to make requests to suppliers. It’s a tool that facilitates the aforementioned RFx functions.
Most RFx software is intended to automate the RFx process. It consists of RFx templates that can be tailored for different vendors; a centralized communication platform and a data repository to store the information sent back by suppliers.
Now that we know what RFx software is, let’s take a look at how it expedites procurement operations for buyers.
6 Ways RFx Software Simplifies the Procurement Process
1. Better Market Overview
Do you want to know what’s really happening in the market? Are you keen to get ballpark figures for resources and raw materials?
Well, in order to get this information, you can either request product and service catalogs, visit suppliers in person or call them directly. That’s all a lot of work and needless to say it’s all very tedious.
Fortunately, by relying on templates within RFx software, you can cut back on the amount of time it takes your procurement team to gather the needed information.
Once you’ve collected the necessary preliminary supplier data including their capabilities and expectations, you can then proceed to invite them to online reverse auctions.
2. Greater Data Visibility
Prior to the advent of sophisticated RFx software, most procurement teams had to rely on multiple technologies to get their jobs done. This made the visibility of data from disparate sources extremely difficult.
For example, in order to communicate with vendors, curate information from suppliers, and manage it effectively, sourcing teams would often turn to Excel spreadsheets, Word documents, and email systems. Thankfully, this is now a thing of the past.
RFx software does away with the need to use a diverse range of technologies. With most RFx software being all-in-one and built in such a way as to easily integrate into ERPs, sourcing and procurement teams now have better data visibility in a single unique centralized platform.
3. Shorter Buying Cycles
Time is definitely money in business operations. This is the reason the majority of chief procurement officers are always on the lookout for ways in which they can effectively reduce the procurement life cycle without sacrificing quality and vendor relationships.
Because RFx software allows proposals, bids, and quotes to be received quicker, it means the choice of vendors can be made more swiftly.
The faster vendors can be qualified the sooner purchase orders can be issued and fulfilled. All of this leads to the buying cycle becoming significantly shorter.
And speaking of vendor qualification…
4. Faster Vendor Qualification
RFx software greatly mitigates the amount of time taken to qualify vendors.
Digitization of the supplier selection process means candidates that aren’t suitable can be swiftly eliminated. This, therefore, leaves your team members free to organize a reverse auction with competent, proficient vendors.
This ability to qualify vendors quickly ties in well with the next point of having access to a bigger and wider supplier pool.
5. Access to a Global Supplier Base
One of the biggest advantages of RFx software is the ability to connect with suppliers from virtually any place on the surface of the earth.
This is of great importance to companies that depend on overseas merchants for key raw materials. And nowhere is this more pronounced than in the United States pharmaceutical industry which purchases the bulk of active ingredients used in the fabrication of medicines from foreign-based labs.
RFx software gives you leeway to not only connect with global vendors but negotiate prices including shipping and transport in such a way that it’s still competitive and cost-effective for you.
6. Cuts Back on Sourcing Costs
Improving the bottom line by mitigating costs during the sourcing process is the goal at every stage of the procurement life cycle.
By replacing traditional, often-times paper-based manual data collection, RFx aids enterprises to keep costs low.
That’s not all but mistakes that used to be made when manually filling in forms can now be avoided.
The Bottom Line
RFx software speeds up raw material sourcing, vendor qualification operations, and the purchase requisition and purchases order process.
It’s one of the key tools that is helping organizations mitigate spending, improve procurement efficiency, and better manage vendor relationships.
Fortunately, you don’t have to look far for reliable and efficient RFx and contract management software solutions.
ProcurePort prides itself on being one of the leading providers of the best procurement software on the market and is trusted by enterprises and organizations such as UNOPS, HUD.GOV, and conEdison.
If you would like to discuss RFx software with a consultant, or to schedule a demo of our procurement solutions, contact us today.