Request For Information (RFI) – 7 Strategies For Better Deals

Giving a request for information is one of the most important steps when you’re about to start your procurement process. It’s only vital to do so so that you’ll have an idea of several variables, such as pricing, the number of products available, and the quality of each. Have a look at our very own procurement process here!

For this article, we are going to tackle how to create a request for information. We will talk about the process involved and the right timing to do so. Once you’re done reading this article, you should now have a pretty good idea of what you’ll need every time you create your request for information template.

What is a Request for Information?

A Request for Information is a method of collecting information from different suppliers before the procurement manager starts to formally source products or services. In simple terms, this is the get-to-know part during the introduction phase. A request for information is usually applied once there are multiple potential suppliers but there is not enough information about the said suppliers. The procurement manager often collects data on potential suppliers but he/she will need to find which among them is the best pick for the company. And the only way to pick one would be to collect and identify information about the said suppliers.

Thus, a request for information will be sent to these suppliers. Once given, the procurement manager will start taking out the suppliers with the least potential until finally, a supplier is chosen by the company.

RFI, RFB, RFQ, and RFP – What’s the Difference?

Since we’re talking about requests for information, we might as well tackle the other sourcing processes. These processes are requests for proposals (RFP), requests for quotations (RFQ), and requests for bids (RFB). All four are used during the procurement processes but they are all different from one another in terms of usage.

RFQ means a request for a quotation. This is usually presented as a chance for potential suppliers to competitively cost the final selected options. It is best suited for products and services that are standardized and commoditized.

Requests for proposals are usually sent to potential suppliers where the company believes they can create a creative relationship or partnership with them. Therefore, RFPs usually leave all or part of the specifics of the proposal based on the response of the suppliers. It is in the RFP where the negotiation strategies of the procurement manager shine.

Meanwhile, RFBs or requests for bids are sometimes called requests for tender. This is an open invitation for suppliers to respond to a defined need, which is in total the opposite of a vague request. It usually covers bidding, hence the reason for calling out many potential suppliers. 

To make things simple and easier, we created this table wherein each request are classified with their different objectives and goals. These requests are very important when it comes to the procurement process and they will be discussed in greater detail in our Negotiation Gamechanger online course.

RFI

Available Specifications or Requirements
Known and Unknown
User or Internal Customer Collaboration
Early purchasing involvement is encouraged
Availability of Supplier Capability
Known and unknown; depends on approved supplier lists
Level of Supplier Collaboration or Commercially Attractive
Encouraged by early supplier or vendor involvement
Need for Detailed Pricing Information
No, but standard pricing is acceptable
Inherent sourcing risks
Low risk
Potential savings opportunities
Low potential

RFQ

Available Specifications or Requirements
Known off the shelf standard goods and services
User or Internal Customer Collaboration
Completed, off the shelf goods or standard services type
Availability of Supplier Capability
Known; usually qualified supplier list
Level of Supplier Collaboration or Commercially Attractive
Completed since it is commercially attractive
Need for Detailed Pricing Information
Yes, based on trade custom or practice
Inherent sourcing risks
Low to medium risk
Potential savings opportunities
Low potential, but possibly negotiable

RFB

Available Specifications or Requirements
Known goods and services
User or Internal Customer Collaboration
Always completed
Availability of Supplier Capability
Known and unknown; depends on preferred or approved supplier lists
Level of Supplier Collaboration or Commercially Attractive
Completed since it is commercially attractive
Need for Detailed Pricing Information
Yes, based on your bid
Inherent sourcing risks
Medium risk, more so if the sole source
Potential savings opportunities
It depends if sealed bid or subject to BAFO

RFP

Available Specifications or Requirements
Unknown detail, the what and why are provided
User or Internal Customer Collaboration
Needed through early purchasing interaction
Availability of Supplier Capability
Known; if RFI is implemented
Level of Supplier Collaboration or Commercially Attractive
Required through vendor and supplier value proposition analysis
Need for Detailed Pricing Information
Yes or no, according to RFP format.
Inherent sourcing risks
High Risk
Potential savings opportunities
Very high, depending on spend category
Editor's note:

The Negotiation Game Changer Certificate Program teaches you:

  • the skills needed to drive better, fact-based decisions that ultimately benefit both organizations and its employees.
  • a comprehensive analytics skill set that will enable you to achieve deals with results you have been dreaming of.

6 Requests for Information tips – What to Include?

If you are now ready to start making your template for your RFI, then you may want to take a look at this section first. This is where you need to take a look at what your RFI should have. You can’t just simply state what you want; you need to consider important variables that will give you the information that you need from your potential suppliers.

When it comes to RFIs, they should have the following variables:

  1. Table of Contents
  2. Introduction and purpose of the RFI
  3. Explanation of the Scope
  4. Abbreviations and terminology
  5. Template to complete
  6. Details of next steps – RFP or RFQ

Once you have the variables listed down, you also need to think of the information that you want to get from the other party:

  • The state of the supply market
  • Supply market dynamics
  • Trends and factors that are driving change
  • Alternative pricing strategies
  • Supplier competition
  • Supplier facilities, finances, motivations, attitude
  • Supplier strategic focus, business, and product plans
  • A detailed list of products/services for pricing requests

Create flawless RFIs in minutes!

Our Negotiation Gamechanger course is designed in a way to help procurement managers and negotiators create the best requests possible. Enroll today!

Check out our website at www.procurementtactics.com for more details.

Why is there a need for Requests for Information?

A very simple answer to this question would be to take a look at how a procurement process is developed. Before you can start procuring supplies, you need to know how much the supplies cost and if the price itself is a good bargain.

If you’re not going to utilize RFPs, then you might as well just buy your supplies from any known suppliers. But for the smart procurement manager, he/she will know that doing so will be detrimental to the growth of the company. When procuring products or services, only the best quality suppliers are bought at a good price. And it doesn’t necessarily mean the cheapest price as well. If the quality of the suppliers is really good, the pricing per supply may sometimes not matter.

Apart from the explanation above, here are other reasons why there is a need for RFPs:

  • To advise suppliers that you intend to source this product or service competitively.
  • To gather information in a way that decides your next step
  • To compile details about potential suppliers and their capabilities.
  • To show that you are fair by including all potential suppliers

FAQ

What does RFI stand for?

RFI means Request for Information. 

What is a Request for Information?

It is a process of collecting data from your list of potential suppliers. The information will help you decide on whom should you procure your supplies.

How to do RFI?

To do an RFI, you need to complete your template for creating the RFI. Once that is finished, the RFI will be sent to your suppliers.

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