We all have a love/hate relationship with buying big ticket items – the excitement of having something new that hopefully solves a problem we are experiencing, against the anxiety of going through the procurement process. Procurement people think this is the exciting part, not so much for the rest of us. There are several tools available to communicate your needs and desires to vendors, each one able to generate a specific outcome along the purchasing path.
The tools are:
Request for Information (RFI)
Request for Qualifications (RFQ)
Request for Proposal (RFP)
Each has its place in the process, depending on what you want to achieve and the amount of knowledge you have about the item or service you are looking for.
Let’s start with the most familiar first – the Request for Proposal or RFP.
Depending on the business you are in, you may have been involved in generating a RFP for a product or service or perhaps been on the other side of the table providing a response to a RFP. Typically, a Request for Proposal is specific in what it is asking for. It will have a specific set of requirements. These tend to be more specific than high level business requirements but not as detailed as technical requirements – in other words, the level of detail required to ensure you get what you are asking for. It may also include specific contract requirements that the vendor will need to comply with. The vendor typically responds indicating how they will satisfy the requirements stated in the document, agree to the contract requirements, and provide specific pricing for the product or service you are looking for.
What do you do if you don’t really know what solution you want?
Perhaps the Request for Information (RFI) or Request for Qualifications (RFQ) would better suit your needs. These two tools are generally thought of as predecessors to the RFP.
The Request for Information is a useful tool when you may not know exactly what you want – you’re looking for vendors with products or services that can solve a particular issue you have. While less burdensome than a RFP, there is still a level of effort required on your part. You need to be able to articulate what you are looking for either through a detailed statement of the issue or a high level set of business requirements for the vendor to review and respond to. If your organization has particular contract requirements, this is a good spot to introduce them. If you need budget cost numbers, this is a good time to ask for them.
Understand that you are not guaranteeing you will purchase the goods or services identified and at the same time the vendor is not providing actual pricing. The end goal of this document is not to get a vendor on board or a contract in place, rather, the objective is to find a pool of vendors offering a solution that can work for you. The RFI or RFQ process is typically followed up with an RFP sent to the vendors you have identified as qualified from the RFI / RFQ process. Having gathered information from a variety of vendors, you are now better prepared to write your RFP.
Level the playing field with Scoring
All of these processes, the RFI, RFQ, or RFP, will require some sort of scoring process for the responses. Typically, the scoring framework is developed in conjunction with the end user of the item or service. The scoring should be based, at least initially, on the vendor’s response to your requirements – do they say their product or service can do what you need it to do? Is their solution acceptable to the user of the product or service? This is the first phase in determining who you would like to have further discussions with.
In the case of the RFI or RFQ, you are looking to reduce the number of vendors you will have involved in the RFP process so you are only reviewing proposals from vendors that can provide you with the product or service you need. In the case of the RFP, you are determining who you want to work with further on purchasing a solution.
There are follow up activities for each of the processes that will help you better understand the vendor’s product or service. We will cover these in the second part on this topic.
If you are looking to begin a purchase that will require a RFP or RFI, check with your company’s Procurement organization. They may have templates and guidance that can help you in creating these documents. If your organization does not have a structured purchasing process and you feel a RFI or RFP is required, there are outside resources that can assist you. These resources bring a level of expertise in developing requirements and documentation as well as working with vendors to assist you in the procurement. You can find organizations that are “vendor agnostic” – they have no association with a specific vendor and are focused on getting you the best product or service. Engaging these resources can help you streamline the process and get a better result – often is a shorter time frame.