Request for Proposal: Tendering for complex requirements and projects
Top class: the RFP process
Efficient design of complex requests with DIG
Complicated projects mean complex requirements. In order to find the best providers under these circumstances, the Request for Proposal (RFP) supports the selection process. The aim of this process is to obtain information for a pre-selection that is as standardized as possible. The tender is broken down into items that are as similar as possible - identical information forms the basis for being able to compare offers directly at the end. However, this approach reaches its limits with the increasing complexity of the project to be tendered (for example, in the case of individual software development, which is often better solved using agile procedures). Nonetheless, the RFP process is a good way to sound out the resources of the market: This is because the RFP offers the supplier the opportunity to design the solution for the requirement and play up its technological advantages in the process. The RFP therefore provides important impetus, especially in connection with technical purchasing!
Generating added value through the RFx process
When it comes to complex inquiries (e.g. in connection with projects or services), the use of an RFP (Request for Proposal) is recommended in the RFx process .Similar to the RFQ, this is aimed at submitting offers, but is structured more dynamically in its entire process. TheRFP process can also be preceded by the step of an RFQ , which then serves to obtain non-binding offers as a price indication for a pre-selection of suitable providers(this is different for standardized products: here the RFQ already serves to obtain binding offers).
Do you have questions about the RFP process? We have the answers!
A request for proposal is a document (or an online form in the case of digital implementation) that companies send to potential suppliers in order to receive offers for a project or product. It describes exactly what requirements are placed on the supplier. Ultimately, an RFP is also a request for quotation that aims to obtain several offers. The RFP process is designed to facilitate the selection process and make the offers of participating suppliers comparable.
An RFP is designed in such a way that it gives the supplier the freedom to offer the right solution for the requirements set. This leads to the supplier's own approaches, which can be based on the technological advantages of a product, for example, and which can ultimately have a value-adding influence on the tendering company's end product.
Typically, an RFP maps the strategy and objectives of the procuring company so that these can be incorporated into the supplier's solution. This gives the purchasing department valuable access to market opportunities, even if the desired comparability of bids is often not fully achieved.
Since an RFP should generate comprehensible implementation proposals from a supplier, this request must be very structured, detailed and specifically described.
The requirements of an RFP should therefore focus at least on the following contents of the offers:
brief summary of the solution offered
Presentation of the supplier in terms of suitability for the tendered project
Detailed description of objectives
Presentation of the project scope in a high level of detail
Schedule incl. key milestones
Description of risks from the provider's perspective
budget plan
List of requirements for all partners involved
Depending on the type of project, further questions may be asked in addition to this minimum content!
The RFP follows after the RFI and the RFQ. This process is recommended because the time-consuming RFP is then only requested by those providers who have successfully completed the upstream steps.
An RFP process is therefore structured in three stages:
As shown in the RFQ process, the RFQ can also focus on obtaining quotations. The following comparison shows the different areas of application of these two processes (please note: in the RFP process, the RFQ is only used for price indication).
Aspect
RFQ - Request for Quotation
RFP - Request for Proposal
Scope/complexity
Standardized products with clear specifications
Detailed solutions for complex projects, creative approaches required
Objective
best price for specific product/service
Identification of the best overall solution
suitability
clear requirements, focus on cost efficiency.
Complex projects: individual solution and expertise important
Examples
Procurement of raw materials, office supplies or standardized services
Implementation of software systems, construction projects or consulting
How to use the RFP process digitally and automatically
Take your supplier work to a new level with the sourcing tool from DIG! More offers, more sources and better prices even without negotiation - this is the experience of buyers who have already automated their sourcing. Customizable request forms and automation processes as well as interfaces to your ERP for bidirectional information transfer ensure maximum efficiency.
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