SIG University Certified Sourcing Professional (CSP) program graduate Karina Swanson discusses the RFx process and how it allows you to analyze real-time market dynamics to ensure you are receiving the right service or product.
There are several reasons you may be considering an RFx strategy as the correct process to pilot for your business. If so, I highly recommend taking a closer look at your portfolio and ask yourself these questions:
- Have you seen a pricing change in the last 12 months?
- Do you have a diverse number of suppliers?
- Do you see small gaps in pricing from dual or multi-sourced products or services?
- Is your portfolio consolidated?
- Have you eliminated all risk factors from your portfolio?
If you answered “no” to any of those questions, then launching an RFx will bring value to your business.
RFx is a term used to describe multiple types of requests. Choosing the right requests for your business is dependent on your end goal. Start by having discussions with your team and stakeholders to identify what you aim to accomplish.
If you are looking for a general understanding of services or products, you can launch a Request for Information (RFI). Most people use this as the first step in their RFx strategy to evaluate their suppliers’ capabilities. An RFI is a useful tool to involve new suppliers on a new project, assess the market for better suppliers, create a short list of suppliers for your portfolio or the next phase of your strategy.
A Request for Proposal (RFP) is sent to specific suppliers (possibly your short list) requesting a solution for specific problems and gives suppliers the opportunity to bid on your services or products. This request also allows you to evaluate the supplier’s skills.