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Written by Marijn Overvest | Reviewed by Sjoerd Goedhart | Fact Checked by Ruud Emonds | Our editorial policy

Request For Information (RFI) — 7 Strategies for Better Deals

Key takeaways
  • The RFI is crucial for gathering supplier information and establishing an accurate procurement database.
  • Moreover, it establishes transparency and accountability, building a good supplier relationship.
  • The RFI helps procurement teams assess the suppliers’ capabilities in fulfilling the company’s goals and objectives.

Requesting information is one of the most important steps when you’re about to start your procurement process. It’s only vital for you to 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

For this article, we will 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.

What Does RFI Meanin Procurement?

As we told you earlier, RFI is a method used to collect information from different suppliers before the procurement manager starts to formally source products or services. 

In addition to what we told you, the RFI in procurement forms part of the buying cycle as it entails collecting information about a supplier. The main goal of RFI in procurement is to help procurement teams with the relevant information they need to make a purchasing decision. 

It helps procurement teams to avoid any issues such as non-compliance and to know if the supplier can provide their needs. 

What are the Areas of Use of RFI?

RFI can be used in a lot of industries such as IT, advertising, and construction. Additionally, RFIs can help in procuring tools for enterprise resource planning and electronic health records. 

In the IT sector, it is typically used to acquire software from suppliers. The software is commonly used for a long period of time. Thus, it is important for an organization in the IT sector to select the right supplier. 

For advertising agencies, RFI is used to ask for a list of industry-specific clients, areas of conflict, and areas of strength of a supplier. 

In the construction industry, RFIs may be sent by a contractor to a client, a contractor to a designer, or from a subcontractor to the main contractor. Additionally, RFIs are used to submit queries regarding the specifications of materials, design drawings, or contract information. 

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 Course For Procurement Professionals.

Available Specifications or Requirements
User or Internal Customer Collaboration
Availability of Supplier Capability
Level of Supplier Collaboration or Commercially Attractive
Need for Detailed Pricing Information
Inherent sourcing risks
Potential savings opportunities
RFI
Known and Unknown
Early purchasing involvement is encouraged
Known and unknown; depends on approved supplier lists
Encouraged by early supplier or vendor involvement
No, but standard pricing is acceptable
Low risk
Low potential
RFQ
Known off the shelf standard goods and services
Completed, off the shelf goods or standard services type
Known; usually qualified supplier list
Completed since it is commercially attractive
Yes, based on trade custom or practice
Low to medium risk
Low potential, but possibly negotiable
RFB
Known goods and services
Always completed
Known and unknown; depends on preferred or approved supplier lists
Completed since it is commercially attractive
Yes, based on your bid
Medium risk, more so if the sole source
It depends if sealed bid or subject to BAFO
RFP
Unknown detail, the what and why are provided
Needed through early purchasing interaction
Known; if RFI is implemented
Required through vendor and supplier value proposition analysis
Yes or no, according to RFP format.
High Risk
Very high, depending on spend category

What are the Details Included in an RFI Template?

Many procurement software offers free templates to companies that are utilizing its services. However, not all have the resources to integrate procurement software. 

To help you in making a template, here are some common details that you will need:

1. RFI 

The first part of the RFI consists of the important tracking details. In this section, you will be able to number your RFI for recordkeeping. And just like other documents, you need to put the details of your company and to whom you will submit it. 

2. RFI Description

In this section, a large space is provided for you to write the information you are looking for. You must take note to keep things short and straightforward. 

3. RFI response

In this section, a supplier is given a large space to respond to your RFI. underneath this is a field where the person who provided you with the information will sign and put the date he responded to your RFI. 

6 Requests for Information tips – What to Include?

We discussed the overview of the details of an RFI. To help you start making one, we are going to show you more of what to include in the document.

The following are the variables you should have in your RFI: 

  • Table of Contents
  • Introduction and purpose of the RFI
  • Explanation of the Scope
  • Abbreviations and terminology
  • Template to complete
  • 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

Why is there a need for Requests for Information?

    Available Specifications or Requirements
    User or Internal Customer Collaboration
    Availability of Supplier Capability
    Level of Supplier Collaboration or Commercially Attractive
    Need for Detailed Pricing Information
    Inherent sourcing risks
    Potential savings opportunities
    RFI
    Known and Unknown
    Early purchasing involvement is encouraged
    Known and unknown; depends on approved supplier lists
    Encouraged by early supplier or vendor involvement
    No, but standard pricing is acceptable
    Low risk
    Low potential
    RFQ
    Known off the shelf standard goods and services
    Completed, off the shelf goods or standard services type
    Known; usually qualified supplier list
    Completed since it is commercially attractive
    Yes, based on trade custom or practice
    Low to medium risk
    Low potential, but possibly negotiable
    RFB
    Known goods and services
    Always completed
    Known and unknown; depends on preferred or approved supplier lists
    Completed since it is commercially attractive
    Yes, based on your bid
    Medium risk, more so if the sole source
    It depends if sealed bid or subject to BAFO
    RFP
    Unknown detail, the what and why are provided
    Needed through early purchasing interaction
    Known; if RFI is implemented
    Required through vendor and supplier value proposition analysis
    Yes or no, according to RFP format.
    High Risk
    Very high, depending on spend category

    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

    Conclusion

    Mastering the art of crafting an effective Request for Information (RFI) is pivotal for any procurement professional.

    This multifaceted document serves as the initial step in the procurement process, providing a platform to collect crucial information from potential suppliers.

    By understanding the nuances of an RFI, including its purpose, components, and strategic importance, procurement managers can lay the groundwork for informed decision-making.

    The ability to discern supplier capabilities, assess market dynamics, and align procurement activities with organizational goals underscores the significance of a well-constructed RFI.

    As procurement practices continue to evolve, adeptly utilizing RFIs becomes not only a procedural necessity but a strategic advantage in securing optimal value for the organization.

    Frequentlyasked questions

    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.

    Create flawless RFIs in minutes!

    Our Negotiation Course For Procurement Professionals is designed in a way to help procurement managers and negotiators create the best requests possible. Enroll today!

    About the author

    My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.

    Marijn Overvest Procurement Tactics