Request For Proposal (RFP) is a methodology for selecting a supplier to provide a good or service, generally as part of a tendering exercise. The essence of tendering is that the buyer announces to the market their intention to purchase a good or service, and then suppliers present their offers. An RFP is a formalisation of this process whereby the buyer defines their requirements in more detail. At its most sophisticated, an RFP involves:
Information technology is used in the management of most Request For Proposal projects. The most manual approach is to draft an RFP document in a word processor which defines the buyers requirements and indicates what information the bidders should include in their proposal. This document might be posted as a hard copy, downloaded from a website, or sent by email.
The problem with sending out a document describing requirements and criteria is the bidders will respond with proposals in very different formats. The buyer must then study each proposal in order to extract the information required to do a rigorous comparison. This is time consuming, error prone, and risks some information being lost.
The next stage of sophistication is to structure a Word document as a questionnaire, distribute this document to bidders, and ask them to type in answers in the appropriate spaces. This avoids the problem of proposals coming back in complete different formats. However, it still requires the buyer to read through each document awarding and noting down scores in a different place. In some cases it is possible to use a spreadsheet instead of a Word document. In this way questions can be structured row by row, the respondents can answer in an adjacent columns, and scores and weightings can be logged subsequently in the same document.
Using spreadsheets, documents and email can be fine for simple Request For Proposal projects. For bigger projects, problems soon become apparent:
In the 1980s, accountants in small companies would often use spreadsheets for their book keeping, tax calculations and annual accounts. It quickly became apparent that the process of accounting was more or less identical between companies, and therefore rather than each company creating their own spreadsheets with different formulas it made much sense to use a standard accounting software package.
In a similar way, RFP software (or rather eRFx software) does not do anything that is not possible to do offline. Rather it formalises the process and makes it possible to handle a much higher volume of work.
SupplierSelect has been designed to reduce the administrative burden of running a sophisticated, rigorous RFP project. All information is aggregated in the same place. It's a web based, hosted service, so both buyer and bidders can access it through a web browser. It incorporates many rules to help comply with procurement guideline, such as OJEU. Questionnaires of any shape or size can be drafted online, answered online, and scored online. Multiple scoring sets and multiple weighted sets can be built, and scores recalculated with a single mouse click. Bidders can registers online and use the service for free.
Unclear about the acronyms - "eRFX", "eSourcing", "SRM" etc? Sourcing Terminology FAQ