What is RFx? In this case, it’s proof that Mrs. Vickers, my pre-algebra teacher, was right. She assured me that algebra would come in handy in my adult life. It only took 35-ish years, but it turns out Mrs. Vickers’s crystal ball wasn’t so foggy after all.
Back to the original question: What is RFx? It’s the shorthand for your “Request for” category of procurement and sales processes and documents. Solve for x.
Explanations and definitions of these are insightfully encapsulated here (processes) and here (glossary). However, if you want an overview of how you can use any of these RFx varieties for your business — either in procurement or business development, then you’re in the right place.
Using RFx for procurement
If you use RFx for procurement, then you’re the issuer creating the RFx. Typically, you’ll submit requests in the following order:
Ultimately, you want to play your RFx cards to select an ideal vendor using strategic sourcing. The RFI will be high level, probing to see if a problem can be solved. It will help narrow down providers to whom you’ll want to submit the RFP, which will be much more detailed and a heavier lift for you to evaluate.
Your RFP will ask for in-depth problem analysis, what it will take to solve the problem, how a vendor proposes they’ll solve the problem, proof of solving similar problems in the past, and, possibly, an estimate on cost. It may also inform responders how responses will be evaluated (e.g. cost = 35%, experience & performance = 35%, response quality 30%), budget expectations, and timing details.
From your pool of RFP responses, you’ll submit an RFQ to one or two providers to finalize your costs. At this point you know the exact product or service that you want so you request a price quote for that specific solution.
“RFB” is also known as “invitation to bid.” While this terminology does appear in the U.S., it may be more common internationally, where issuers post “tenders,” and responders submit “bids” in response to those tenders.
RFAs are associated with government agencies and nonprofit organizations. Funding has already been set aside for a specific requirement and now agencies or organizations are seeking recipients of funding. Agencies want to solve a very specific problem, such as building the capacity for drinking water systems. Nonprofit organizations have grant money available and seek applications to distribute the grant, such as for placing veterinarians in underserved areas.
Using RFx for business development
For the 69% of salespeople who do not have enough leads in their pipeline, RFx opportunities are an opportunity to drive revenue. When you use RFx for business development, then you are the RFx responder. Response teams require expertise from multiple areas, including sales, product development, product marketing, finance, contracts, and more, depending on the product or service you sell. It’s up to you to respond appropriately in an attempt to put your product or service at the top of the list for RFx issuers.
If you’re lucky, then you have a unified content repository of some sort to reference for your responses. Many sales professionals still work from personal content libraries they’ve amassed on their own, which is problematic for brand management and onboarding new employees. If you’re even luckier, then you represent one of the 43% of organizations using RFP-specific software, which helps automate response processes.
Responding to an RFI will get your foot in the door. Hopefully, it’s something you do regularly and doesn’t take up a lot of bandwidth, for you or any other response team members. This will be early on in the sales process, possibly too early to even count toward your pipeline. When an RFx is not certain of gaining revenue, then you want to minimize resources spent on responding.
However, once you’re selected to respond to an RFP, you can add prospective revenue to your pipeline. This will also be the largest investment as far as resources that you’ll commit to responding to an RFx.
The RFP is your opportunity to lay all your cards on the table. Show the issuer what you can do, how you can do it, and why you can do it better than anyone else. Expect to be evaluated on your experience, your price tag, and the quality of your response. By evaluation, I mean you’ll be measured against all other responders in as much of an apples-to-apples comparison as the issuer can comprise based on the complexity of the response.
The RFQ will be the final deal number, if it wasn’t already requested in the RFP. It will highlight the solution you’re providing within the issuer’s budget. If your solution comes standard with additional functionality beyond the scope of what the issuer originally requested (e.g., integrations with other software, free training, or VIP support), the RFQ is a great opportunity to call that out.
What is RFx automation?
RFx automation reduces the manual processes required to issue and respond to any RFx. For issuing, RFx automation streamlines how requests are created and organizes the evaluation process for you. For responding, RFx automation uses artificial intelligence to Auto Respond to any RFx based on content in your Answer Library. Organizations that use RFP-specific software are not only able to respond to 43% more RFPs than those without a designated RFP tool, they’re able to turn around each response 40% faster.
RFx response automation can also extend to responding to security questionnaires, due diligence questionnaires (DDQs), scopes of work, and whatever else you may be requested to respond to in your sales or client support lifecycles. The functionality can also serve you well for proactive proposals, where you need to deliver a proposal or presentation even though one wasn’t specifically requested. This is common in business proposals when a prospect wants something in writing to share with management or the C-suite to build a business case for adding your solution.
Whether you want to use RFx for procurement or business development, if you’re going to do it for the long term, then RFx automation will be a boon to your workflow, morale, and bottom line. The math works out. Mrs. Vickers says so. Learn more about AI-enabled RFx management by scheduling a demo.