The Difference Between RFQ, RFP, and RFI Software
July 25, 2019 | 3 min read
Use the appropriate RFX software for your different requests.
It’s tough to keep track of all the e-Procurement technology available today. There is a spectrum of functionality and every organization doesn’t need every kind of procurement software on the market. Because procurement executives are naturally inclined to be efficient in their purchasing, it’s no surprise that you want to be informed before purchasing software to handle request processes. But what exactly is the difference?
As we explained in ProcurePort’s Beginner’s Guide to e-Tendering, the term RFX is the umbrella term for all three of request categories including Request for Quote (RFQ), Request for Proposal (RFP), and Request for Information (RFI). To break it down, let’s take a look at the differences between these three RFX software platforms and evaluate which ones you need to improve your procurement processes.
RFX Software Similarities
In general, this kind of RFX software allows procurement organizations and departments to conduct buyer-originated online requests that reach out for quotes, proposals, and information from potential suppliers. Buyers use these e-Sourcing solutions to gather responses and make decisions about pursuing future procurement relations with the respondents. The three kinds of specific electronic tendering or e-RFX solutions are RFQ, RFP, and RFI solutions.
As varied as e-Sourcing can be, these three solutions have a lot in common. First are automations. These are business process steps automatically completed when enough data is available to move to the next step. In pricing automation for example, if only one bid comes through under budget, it may be accepted by the buyer’s system due to pre-programmed human authorization. The second thing that request solutions have in common is their hosting location. If you have one or more RFX software solutions, they will typically be hosted in the same on-premise or cloud-based location as you e-Procurement platform. Actually, in order to automate requests, the software solution requires access to peripheral system data. Cloud-hosted solutions, for example, can execute requests without dealing with access issues or time lag. Finally, all three request solutions are designed with the same goals in mind: to provide a fast and secure way to collect supplier information and bids.
Differences Between RFX Software Solutions
As requests, RFQ, RFP, and RFI solutions naturally have similar formats but contain different content, features, and fundamentally different processes to complete them. The difference in software is really a reflection of the type of request. Whether the desired response is a Quote, a Proposal, or Information in general, the format will be adjusted to fit. Here are a few ways they differ:
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number of data fields available
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size of data fields available
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integrated peripheral platform functionality
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business process management (BPM) tie-ins
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electronic authorizations by custom organizational chart
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internal and external distribution channels
What about concrete examples? An RFQ will have fields for extensive financial input. Dropdowns will be formatted in the specific currency of the buyer. An RFP with multiple parts may contain automated SMS or email notifications (using Directory Access Protocol or DAP integration) as reminders for later submission deadlines. An RFI will likely include larger data fields so that respondents can be detailed in their responses.
No Need to Limit Your Organization
Though the software solution for each type of request is slightly different, all three typically come standard as part of a complete RFX solution. In other words, if you purchase a quality e-Procurement platform, you will have access to all three solutions. You will be able to choose which fits your needs in each situation. There is no need to limit your organization by declining certain kinds of request software.
It is understandable for procurement executives to seek out a way to pare down their software purchases and save on costs, but living without all three types of RFX software isn’t necessary. It’s a little like trying to save money on your Office Suite software by eliminating fonts. They are components to the functionality of multiple office programs. From the developer side, providing as many as possible makes more sense. The variety enriches the software but doesn’t necessarily add to the overall cost. In fact, having a full variety is a key part of what makes the software appeal to procurement customers facing a variety of use cases.
Want to see real results? Check out this case study of how a global leader in subsea systems implemented ProcurePort’s electronic RFI software to generate significant cost savings just by increasing bid response.
