RFI: What Is It and What Are Best Practices for RFI?
By Sophie Lui, Insight Solutions
When you’re looking for a supplier for your product idea, you need to make sure that you can find one that meet all your critical requirements. But how can you make it happen? How can you be sure that you’re on the right track of finding such a supplier?
This is when RFI chimes in.
RFI is short of Request for Information. It collects basic but critical information, such as their expertise and capabilities, of the potential suppliers before you select their products or services.
For example, you have a great idea about creating an earphone, and when you search online, you see about 100 companies that claim to do what you need. You can of course visit their websites, reach out to them or drop by if they’re nearby to get the information you need. But think about how much time and money it would cost if you actually do that.
Things could be much different if you have a RFI template that your potential suppliers can fill.
However, if you have only 3 to 4 potential suppliers to source from, you can jump straight ahead to RFP (Request for Proposal).
RFI is very effective and efficient if you have a long list of potential suppliers to select from. In addition, RFI allows you to gather the information about your suppliers before you tell them much about your business or your project. Therefore, the RFI you receive from your suppliers could tell you more objective information about their experience and expertise.
In a nutshell, RFI:
- Provides you with basic, specific information about the potential suppliers, so you can better decide if they have the capabilities to meet your needs;
- Shows your potential suppliers what you value and want to see in them, and better align your needs with businesses with the same value;
- Saves you much time from browsing for possibly useful information on their websites, since you don’t always find everything you need there, thus increasing the efficiency in the research process and reducing the overall cost;
- Increases the transparency and commitment of both parties from the very beginning.
When should I do an RFI?
With what’s said above, you can ask the potential suppliers for a RFI if you:
1) have a number of potential suppliers to choose from, and this is the first contact between you and most of them;
2) are early in the buying process, and want to collect objective information regarding the experience and expertise of your potential suppliers before reveling much information about you;
3) want to collect the basic information of the company, such as the management team bio, company history, and specialties. So you can decide how to move forward with the process after comprising what you get.
What are the best practices for an RFI?
Here isfor your reference. You should use it as a template only, since the goals and targets of your project should be different from ours. Feel free to add or subtract some of the questions to make it perfect for you.
The ideal RFI should gather formal, structured and comparable information of the potential suppliers, while show your respect and consideration of their time and efforts. Here are some of the best practices for the RFI process:
1) Follow a format
So you can compare the results under the same circumstances. One of the major goals for RFI is to collect information that you can compare, and decide which supplier fits your need the best.
2) Be specific about your questions
To receive effective and useful response, make sure that your questions are specific enough. Ask only one question at a time. This helps avoid confusion and delays in response time. After all, the last thing you want to do is to create a second RFI to get more information that is left out in the first RFI.
3) Limit the questions asked, especially in terms of pricing
As mentioned, the RFI gathers only the very basic information about the suppliers that help you decide if they have the capabilities to meet your needs. That said, information about the company’s financial status, quality certifications and staff number should be enough for you. What’s more, pricing information should not be included at this stage.
4) Be respectful to potential suppliers’ time and efforts
It takes time for your prospective suppliers to prepare for the RFI, and the more questions you ask, the more time it takes for them to reply. So, always respect their time and money spent, and give them appropriate time to respond. Mutual respect and understanding always gets your supplier relationship off to a good start.
In all, the RFI process can be very valuable if you have a long list of potential suppliers to choose from. But if you have only 3 or 4 companies to talk to, you’re totally good to jump straight ahead to FRP (Request for Proposal) or RFQ (Request for Quotation). It’s all up to your project’s requirements.