What Is An RFP And Why Is It Important To Digitalize It?
What is an RFP? A Request for Proposal (RFP) represents a document or a sourcing stage where proposals are solicited from suppliers or solution providers. The Buyer uses the RFP to state the requirements of the goods or service being procured, the terms and conditions of the engagement, the vendor evaluation criteria, and most importantly the bidding sheet. This bid sheet outlines the quantum of goods or services and suppliers need to quote the price for the same. RFPs apply to all types of spend – indirect, direct and capex. Every sourcing process needs an RFP in some form or other; with varying complexity depending on the nature of the item being sourced. 3 key aspects of an RFP that underline its importance 1. RFPs precede the ‘negotiate & award’ stage and hence need to be managed from that perspective An RFP is followed by a negotiation process after which the business is usually awarded to the most competitive supplier in terms of price, capability and service. In an online