The sourcing process can be somewhat daunting to those who do not use it on a consistent basis in their regular work routine. Because of this, there can be confusion about what steps to take to make the most of the sourcing process and keep it streamlined and efficient so that it does not become overly, and unnecessarily, cumbersome. In the following piece I will talk a little about the differences between an RFI and an RFP and when it is appropriate to use one or the other or even both.

Let's start with the RFI. An RFI by definition is a request for information. At this stage in the sourcing process the end user is looking to gain knowledge around what the market has to offer as far as who the suppliers are and what their capabilities are. An RFI may also be used to help build out the scope of the category if the end user is unsure about what exactly they are looking for and presently only has a framework established. Depending on the category of the project and level of complexity, the RFI is likely to consist of a brief overview of the organization soliciting the information, unless the RFI is blind. If the scope of the project contains confidential information and the end user would like to collect market dynamics before establishing the next steps it may be more appropriate to submit an anonymous RFI. There are risks associated however, such as a lack of participation from the supply base and misinformation, if the suppliers are unsure of how to focus the response. An example of this would be in the marketing space, an advertising agency may have several core competencies and if they do not know the type of company they are responding to, they may not be able to present as valuable data. Other components of the RFI include a well-defined timeline, a high level overview of the scope of the project, if available at this stage, and a brief questionnaire aimed at collecting supplier capabilities. The document does not include pricing. The RFI is generally submitted to a broad base of suppliers, casting a wider net at this stage is actually recommended to increase the potential of selecting the best fitting suppliers for the next step in the process. An RFI is not needed when there is a clear scope of work, a good idea of who is available in the market, and a solid path forward for achieving a goal.

The RFP, or request for proposal, is used to solicit pricing from a narrowed group of suppliers. You can submit this type of request to a broad base of suppliers, but keep in mind that the analysis will be more in depth. An RFP can be used on its own or as a sequential step after the RFI is issued and received. The RFP can include capability eliciting questions and the request for pricing information in order to alleviate the RFI stage and streamline the sourcing process. At this stage the user likely has a clear scope of work and can include these details in the document so that the suppliers can quote the products and/ or services accurately. While the RFP is often used to seek competitive pricing or a new provider for the category, the RFP can also be used to derive new and innovative solutions to a current problem. At the RFP stage the user can indicate a clear timeline and expectations from the supplier. The user can also explain the strategy for approaching the spend category and solicit feedback to improve the strategy from the suppliers. The RFP should be thought of as a collaborative first step in the sourcing process and in building a relationship with a supplier.

The sourcing process can be very flexible depending on the user's needs and current situation. One vital piece of advice when deciding to pursue an RFI or an RFP or both, is to be prepared. Take the time to research the market on your own and understand to some degree the current supply base adn market conditions. Make sure that you have the appropriate buy-in from decision makers internally and a plan for resource allocation to assist with the RFP process.

For some useful RFx worst practices feel free to peruse my colleague Dave Pastore's post, Two More RFX Worst Practices.
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Jennifer Ulrich

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