Are you making the most of Requests for Information (RFI) in your procurement model? The modern procurement cycle has become increasingly more complex over the years. Fortunately, the advancement of tech has not been lost within the procurement industry. Today RFI software has made life easier for both suppliers and procurement teams, allowing them to use centralized platforms to handle the RFx-to-award process in record times. But what exactly is the role of RFI in procurement? Let’s explore.
What is RFI in procurement?
In procurement circles, Request for Information (RFI) is a process that forms part of the buying cycle. It is a business practice whose goal is to gather written information about a supplier.
The main goal of an RFI is to furnish procurement teams with the necessary information they need to make a purchasing decision.
Following an RFI, further requests in the form of Request for Proposal (RFP) and Request for Quotation (RFQ) can then be issued to vendors who may prove a good match with the company.
The Purposes of RFI in Procurement
From the name, we understand that RFI involves the collection of information. However, this isn’t the only objective. The multiple roles of an RFI document can also be summarized in the following manner.
1. Provides Information About Products and or Services
As a solicitation document, the RFI in procurement is used to obtain details about the products and or services provided by a supplier. This is general information so a buyer can have a better understanding of what the vendor can provide. The RFI is not binding to either supplier or buyer.
2. RFI Allows a Buyer to Understand the Market
How will you know if you’re getting a raw deal or a fair one? Prior to deciding to buy, it is important to first understand the market. This can be done through the issuance of requests for information to various vendors. RFIs allow information to be gathered in a structured and formal manner that makes a comparison between vendors easier.
3. RFI Process Facilitates Decision Making
The RFI procurement process streamlines decision making efforts for sourcing and procurement teams. It sets the foundation for additional solicitation documents – namely RFP and RFQ – to be requested if necessary. RFIs assist in highlighting competitive vendors and distinguishing them from each other.
4. RFIs Can Be Used to Build a Database
To get the best deals and most favorable terms from suppliers, it’s key to have a well-vetted internal database to choose from. The time taken to prepare RFIs and send them to vendors, and that spent reviewing feedback is never wasted. It’s a necessary step as it aids procurement teams in establishing a database from which future vendors can be selected.
5. RFIs Help in the Formation of a Procurement Strategy
Every procurement team understands the need to have a strategy where purchasing inventory is concerned. This cannot be done efficiently without information gleaned from RFIs. Therefore, forming a winning procurement strategy is a very integral part of RFI in procurement.
The Bottom Line
Sourcing and procurement teams now have access to an array of software to help them mitigate organizational spending, improve efficiency within their procurement processes, and vendor management. ProcurePort proudly provides a suite of RFI software solutions that make managing vendor relationships easier. Contact us to discuss this RFI software, customized procurement solutions for your business or to schedule a demo.
