E-Sourcing Forum » e-RFx Best Practices and Associated Benefits

e-RFx Best Practices and Associated Benefits

October 3rd, 2007 at 05:51am David Bush - Iasta

e-RFx, likely one of the most common acronyms in the procurement, sourcing, and related literature, does not stand for anything in particular, as the X can be a placeholder for I, P, Q, or B which stand for Information, Proposal, Quote, or Bid (though the latter is primarily used in the public sector).

Some benefits of the e-RFx process include:

Sourcing Cycle Time Reductions
An information gathering and analysis cycle that used to take months can now be completed in a couple of weeks as web-enabled e-RFx tools allow for the instant sharing of documents between an organization and its suppliers.
Centralized Repository
One of the most significant benefits of an e-RFx solution is the centralized data repository that allows for all of the organization’s supplier and sourcing related information to be stored in one common location and accessed by all relevant organizational stakeholders.
Collaboration
e-RFx technology can be one of the most significant enablers of collaboration between team members, stakeholders, and suppliers – as all parties involved can come together through the use of a single tool to share information, ask questions, and receive a response.

The best way to ensure that your e-RFx is accompanied by all of the benefits it can bring is to employ best practices. Some of the best practices that can be employed include:

Communication with Suppliers
After the RFx has been sent out to the suppliers, follow up with a phone call to make sure they received it, can fully access it, and understand what they have to do to respond. Be sure that they clearly understand any specialized or customized requests and that their questions get answered promptly. Also be sure to follow up with them immediately after the award, even if they lose, to help them understand why they did, or did not, receive an award and what they can do to make them more attractive as a supplier in the future.
Understand the Requirements
Be sure to understand the technical specifications and requirements, baselines, and demand forecasts. Solicit input and feedback from all key stakeholders and be sure to include all of the information in the RFx up front to insure that the bids received are accurate and that the suppliers will be able to deliver to spec.
Manage the Process
Keep on top of the process from start to finish. Follow up with internal stakeholders regularly, follow up with suppliers in a timely manner, start the analysis phase as soon as the reply deadline has passed, and make the award decision quickly.

For more information on the e-RFx process, it’s benefits, and associated best practices, see the e-RFx for Total Value Management: The Strategic Sourcing Workhorse wiki-paper over on the e-Sourcing Wiki. In addition to more detailed information on a successful e-RFx process, it also overviews some of the internal and external pressures that the e-RFx process can address in addition to basic e-RFx requirements.

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Entry Filed under: General, Supply Management Best Practices, Technology / SaaS, e-RFx

1 Comment Add your own

1. Eric Strovink | October 3rd, 2007 at 11:06 am

I would add, “make sure your e-sourcing software works well.” All RFX software is not the same, despite analysts’ assumptions that it is a “commodity” or that RFx technology is “old news.” As recently as 12 months ago, I was made aware of an RFP effort that nearly failed due to software inadequacies. It may have four wheels and some shiny chrome, but it also might be a Yugo.

Make sure that you force the e-sourcing vendor to show you the whole process of setting up and running the RFP. Make sure to ask tough questions about the kinds of data that can be collected, preferably with a specific RFP and commodity in mind, so you can be practical rather than theoretical. Make sure to ask how that data can then be analyzed and how optimal decisions can be made. Make sure that you can do all these things yourself — self-sufficiency is key to extracting value.

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