By Sarah Chambers

Large corporations and government agencies don’t shop around for the best contractors and freelancers the same way a SaaS company or a small business might.

Rather than relying on word of mouth, a quick Google search, or a Facebook ad, these organizations follow a procurement process that ensures fair business practices and quality results.

As a preliminary step in the procurement process, an RFI gives a company or organization the information it needs to move forward with an RFP and RFQ. But what exactly is an RFI and what does this acronym stand for?

RFIs are important because they reduce blind spots and empower your team to make better decisions. With more information at your disposal, you can understand the marketplace and get a better sense of the questions you’ll need to ask as you move forward in the procurement process.

How does an RFI work?

Step 1: The buyer develops the RFI.

RFIs are written documents with the goal of collecting information from sellers. This information can be used to help buyers make a purchasing decision. The questions that are included in an RFI are specific and straightforward so that the sellers understand what the buyer is asking for.

Sellers can find an RFI on the company’s website, in databases like Procore, and government web pages like grants.gov.

Step 2: Sellers draft responses to the RFI.

Once a seller finds an RFI, they have a window of time specified by the buyer in which to complete it.

The information that is collected in the RFI is organized in such a way that it can be compared and contrasted against the information that other sellers submit.

Step 3: The buyer reviews all the sellers’ responses.

After the deadline for RFIs closes, the buyer reviews all of the responses submitted by the sellers. In this step, the buyer is looking for information about the companies, the products or services they offer, its history and background, and other factors that can impact how well the seller can deliver on the project.

Note: Price, budget, timeline, and other specific information aren’t covered in an RFI since it’s a part of step one in the overall procurement process.

Step 4: The buyer moves onto the next stage in the procurement process — the RFP.

After the buyer has determined which of the RFI submissions meets the preliminary qualifications for the project, they’ll move on to the next step in the process which is an RFP (Request for Proposal).

An RFI is the initial step a company takes to solicit information from potential sellers, as described above. Its main objective is to obtain information, not to make a final decision. Once the RFIs are submitted, the company will review them and shortlist the best options, armed with more insight. Then, they’ll send an RFP to that short list of sellers that satisfied the requirements of the RFI.

A Request for Proposal …read more

Source:: HubSpot Blog

Author: Aaron