If you’ve ever been involved in the B2B business as a vendor in the past, you’re most likely used to getting RFPs from people interested in your services and products. An RFP, or a “request for proposal” is a document that a company, searching for services, uses to get an insight into the related costs and offerings from many different vendors all at once.
If the vendor agrees to participate in the RFP, he would then answer the queries posted by the company as to what services, products, costs and methodology he’ll use to fulfill the company’s needs.
Since the RFP plays a significant role in enterprise software, it wouldn’t be a revelation that many of us have strong opinions on the manner in which these ought to be structured. By not carefully and properly assembling the content of the RFP, companies would be pushing the best vendors away.
Another piece of misinformation surrounding the modern concept of RFP is not knowing what an RFP actually is; many times, an RFP isn’t an RFP at all. It has begun to assume the form of an umbrella term that is broadly applicable to RFIs and RFQs as well, including the RFP of course.
While all the three hold some common ground, they have clear distinctions as well. Understanding the proper functionality of each of these will help improve the way you select the gigs as a vendor. Here’s a quick list of what these documents actually mean:
RFI is short for “request for information”. It’s actually just a formal preliminary query disguised as a document that’s used by the companies that just intend to understand the marketplace of their niche a little better.
For instance, if a company is searching for a CRM package and it has no preliminary knowledge of the industry, it would issue an RFI and send it to the different vendors to get a basic understanding of the range of options it can exercise in the CRM space.
Since RFI is essentially just a fact-finding document, it’s better to ask open-ended questions that would allow the prospective vendor to fully expand on the full range of their offerings. Usually, the RFI would be a statement of the broad challenges facing your firm – and the vendor can come in and tell you where they can contribute. They’ll explain their market position, and how they license their products and what other extraneous fees can arise.
RFP is short for “request for proposal”. Essentially, it’s a document that explicitly asks specific vendors to propose hypothetical solutions to a business or a company’s predicaments.
Usually, an RFP follows an RFI; it’s in the rarest of cases that a company goes directly to the RFP stage without going through an RFI first. An RFP would ideally contain specific details of what the company’s requirements are, and what complexities the client company is facing.
RFQ is short for “request for quotation”. It’s an even more explicit document than the RFPs and RFIs; it gets down into the nitty-gritty details of the exact specifications that is demanded by the client company.
Unlike the RFP, where the vendor has the chance to use their creativity and insights to propose unique solutions, the company that sends out an RFQ has already determined what exactly needs to be done, and they want a vendor who can give them that exact solution or product built along the precise guidelines laid down in the document. Luckily, there are neat online tools like Quikflw that allow you to automate such processes and send professional looking quotes, even from your smartphone, in just a few clicks!
Usually, an RFQ consists of tables listing specific requirements, where the vendor has to assess their ability to meet each of those.