Everyone is careful when they make a big purchase, like a car or a house. They review products, shop around, and make sure they’re getting the best deal and the features that meet their needs.
Businesses are no different. They ask a lot of questions, price shop, and compare products. The only difference is that instead of going to car dealerships or open houses, businesses ask vendors to send them information. These requests are called Requests for Information (RFIs) and Requests for Proposals (RFPs), and they’re a big part of the B2B purchasing process.
Each of these documents contains a list of questions a potential buyer needs answered before they will commit to a purchase. What are they and how are they different? This blog post will explore both the RFI and the RFP.
What is an RFI?
A Request for Information is exactly what it says: a formal request for information about a product or a service from a buyer to a group of vendors.
The RFI is often the first request sent out during the buying process and is usually used by the buyer when they aren’t familiar with the vendors in the market, or with the products that are available.
RFIs are much more broad than RFPs; the set of questions in this request helps the buyer evaluate a variety of products quickly and easily. They also contain questions that help purchasers understand whether or not a product or service will meet their specific needs as a business. If a buyer doesn’t know exactly which solution will solve their problem, they might use an RFI to narrow down a pool of vendors.
What is an RFP?
A Request for Proposals is a more detailed document, sent out later in the buying process when the buyer knows what sort of product they need to solve their problems. The buyer is often looking for information about how vendors will meet their needs; sometimes with a product, and sometimes with a project. Usually the RFP describes the requirements of the project and then invites vendors to submit proposals by a deadline.
An RFP asks each vendor to create a detailed proposal outlining exactly how they will complete a project This includes budget, the specs of the vendor’s products or services, a scope of work, a timeline for the tasks that will be performed, and any other information that will help the buyer make a decision. The RFP also typically includes due diligence materials, like security questionnaires or due diligence questionnaires, to ensure that the vendors aren’t too risky for the buyer.
RFP responses can be quite long and complex. Vendors may find themselves answering many pages of questions as well as creating customized content that illustrates how their product can meet the needs of the customer.
What is the difference between RFIs and RFPs?
RFIs and RFPs fall into the same category: RFX, or a range of requests sent to potential vendors, but they have different uses.
An RFI is exploratory. Companies send them out to familiarize themselves with products and vendors.
RFPs are used when an organization has a complex business problem to solve and wants to see exactly how each vendor will solve it. RFPs may also be posted publicly rather than sent to a shortlist of vendors, drawing in bids from vendors the buyer may have no relationship with.
Responding to complex RFX
Although they are a standard part of the buying process, requests can be time consuming for vendors. It can take hours to respond to one, which can be overwhelming for a bid team that responds to many RFX a year. That’s where proposal automation can make a difference.
Ombud’s RFP automation software allows bid teams to automate content-centric activities in their sales processes. Our platform combines content collaboration, project management, and machine learning to streamline the creation of sales documents like RFP responses, security questionnaires, sales proposals, statements of work, and much more. Interested in learning more? Request a demo here.