What Does RFx Mean?
eRFx is a term used for a procurement technology software that allows sourcing professionals to submit an electronic request for a particular type of information to qualify potential suppliers. The “x” stands for proposal, quote, information, or tender.
Before advancements in sourcing and procurement technologies, these kinds of requests were issued on paper, over the phone, or by fax or email, which made apples-to-apples comparisons among different suppliers difficult and time consuming. eRFx software makes the process for requests for proposals, quotes, information, and tenders standardized, efficient, and compliant.
eRFx Types and Formats: RFI, RFP & RFQ
Electronic RFI, RFP and RFQ also known under the umbrella: RFx software. eRFx software streamlines gathering qualitative and quantitative information from potential suppliers. By standardizing the supplier evaluation process with the software’s tools and templates, the source-to-contract timeline is expedited. This makes the process more efficient for both buyers and suppliers. With all the information housed in a central repository, supplier information can quickly be searched and information can be extracted for further analysis and evaluation.
An eRFx can include a supplier pre-qualification (RFI) or a price collection/request for quotation (RFQ), or a combination of both with a request for proposal (RFP).
RFIs, RFPs, RFQs, and RFTs Defined and Common Formats
Several types of Request for formats exist due to the complexity of the RFx process, which can consist of one simple RFQ or several RFx’s in connection with each other. For example, the process may begin with an RFI, then transition to an RFP, and finally an RFQ.
There is a widespread agreement about the definition of the RFI, but formats for RFPs, RFQs, and RFTs can vary between countries and companies.
Below are the most common 'Request for' formats:
- Request for Information (RFI) – An RFI is commonly used to collect information about products, services, or suppliers. It typically precedes the other RFx processes listed below and is used to help a buyer to shortlist potential suppliers to evaluate. An RFI can be used with any of the RFx processes.
- Request for Proposal (RFP) – This document’s purpose is intended to collect a third-party provider’s products, solutions, pricing, and capabilities in the form of a pricing proposal. An RFP should include the guidelines, instructions, and forms necessary for the applicant to submit a proposal. The end goal of this document is to invite suppliers to make a bid.
- Request for Quotation (RFQ) – After a shortlist of qualified suppliers is determined, an RFQ is issued to a subset of suppliers for a quote on the products or services and is typically used to make an award decision.
- Request for Tender (RFT) – A formal request asking for offers from potential suppliers to supply clearly defined goods or services or works. There are often highly technical requirements and a prescriptive solution.
The Difference Between RFQs and RFTs
Although both RFQs and RFTs typically request pricing, the binding nature of the incoming bids varies. Some perceive the bids as non-binding because the buyer is investigating the possibility of sourcing a product or service, while others view the prices as direct offers that can lead to a supplier contract.
The Difference Between RFPs and RFIs
An RFP typically includes open-ended, free-text questions, whereas a standard RFI has closed-ended questions. RFPs can be used for creative projects or service agreements in which the capabilities of the suppliers are harder to compare. However, an RFP can also just be a request for pricing, where the prices are binding offers that lead to a contract.
Scanmarket’s RFx Software
Scanmarket’s eRFx tool automates the RFx process, creates more transparency, and helps you reach more suppliers.
RFI - Request for Information
RFQ - Request for Quotation
RFx - Request for Information, Quotation & Proposal