Most projects and organizations require outside support to achieve their objectives. They often lack information on the requirements, prices, and technology involved.
In this case, they need information on their requirements to proceed further. They get this information through Request for Information (RFI).
They share the available information with prospective sellers to provide them with the necessary information through RFI.
RFIs are for informational purposes only, and no party has to abide by them unless both parties sign.
Let’s discuss the Request for Information in detail.
What is Request for Information (RFI)?
You use RFI when you know the requirements but lack critical information. An RFI is a Request for Information document where buyers ask the seller for their response related to their product or service at no obligation.
An RFI defines the requirements, product specifications, or qualifications that the buyer will need. Buyers can highlight their challenges and what kind of cost-effective and efficient solution they are looking for.
Through RFI responses, strategic options, lower-cost alternatives, and cost reduction opportunities may be identified, and this can be used in Request for Proposal (RFP) and Request for Quotation (RFQ). Usually, RFI is followed by RFP or RFQ.
If RFI is not used during the initial stage of the project, you may end up writing one later, causing delays in project completion.
How to Create an RFI Document
RFI is two-way communication. The buyer and seller can both use it to get the required information. There is no specific way of writing Request for Information. It depends on your requirements.
Big organizations have more streamlined processes and have more formal approaches, including a formal RFI template.
This template can have the following elements:
General Information: Here, you can provide basic information about your organization, business, and contact address. This helps sellers understand your business, and they can provide the requested information in the best possible way.
Requirements: If you have any pre-qualification requirements, credential requirements, or technical restrictions, you can mention them. It helps prevent receiving unnecessary queries.
Requested Information: This is the key section. Here, you will provide details on the requirements, and the supplier will review them and prepare their response.
Be as clear as possible and keep it brief. You can provide the deadline and the format of the requested information, including supporting documents, brochures, etc.
At a minimum, an RFI can include:
- Basic background of your company and contact details
- Request for their background information and business area, etc.
- Terms and conditions
- Price information
- Information on product and service
- Product or service-specific questions
- Past similar experiences
- Date and expected response from bidders
- To whom it was submitted
- By whom it was submitted
- Supporting attachments can be attached
Below is an example of RFI.
Common Mistakes with RFI
- Buyers sometimes compare one seller with another and mix up communication, hurting relations.
- Many times buyers fail to provide precise details on requirements.
- Sellers can make mistakes by not reviewing the information thoroughly and submitting responses because they are focused on getting business instead of the right business.
- Sellers sometimes make incorrect assumptions because of unclear explanations.
Benefits of RFI
RFI offers immense benefits for an organization. You get a wealth of information for your requirements and contact details of potential vendors with no obligation at all.
If you require their services, you can contact these vendors; it saves time and effort.
RFI works well to build connections and a platform for a long-term relationships.
RFI vs Budgetary Quote
Many organizations use the term “budgetary quote” instead of RFI to get pricing and delivery details of purchasing, hardware, spare parts, consumables, repairs, etc.
They get the RFQ approval and float the tender based on the received price estimations. Once the tender is closed, they match the received prices against the budgetary quote and award the contract.
Budgetary quotes validate the prices and offer received during the tender stage.
An RFI helps get information without obligation to either the buyer or seller. After receiving the required information, the RFI process closes, and you move on to the next process. This helps buyers create RFP or RFQ and then choose a partner.
Are you involved with the Request for Information process in your organization? If yes, please share your experiences with it through the comments section.