What is RFX?
RFX is a term that’s used to denote Request For X (where the X stands for a specific desire). The three most common requests include Request for Information (RFI), Request for Quote (RFQ), and Request for Proposal (RFP).
[Read more: RFQ vs. RFP vs. RFI: What's the difference?]
Broadly speaking, the RFI aims to educate, providing the procurement team with new information. The RFP gives procurement teams proposals to compare. And, the RFQ quantifies the cost of procuring the good or service. While each of these procurement vehicles has a different purpose, they follow relatively similar trajectories. Here’s what to know about RFX processes and ways to automate this procurement function to save time and money.
Benefits of RFX Processes
Any RFX process should empower the organization to spark competition among suppliers in order to find the best possible value for the goods or services needed. By sending a well-crafted, strategic inquiry to a group of potential vendors, the organization can ensure it receives high-quality bids for the right item at the right price.
RFX processes also enable the standardization of procurement. Structure and organize your RFX to make sure that every supplier is preparing the same information: price, timeline, quality specs, and more. With RFX software, you can create formatted templates that make it easier to compare suppliers to one another and find the best possible partner.
An RFX process can also make the procurement process more streamlined. Send your RFI, RFP, or RFQ to suppliers at the same time, evaluate everyone together, and provide your feedback sooner. All bids can be saved for reference, and with RFX software, you can easily move a purchase order through the procurement lifecycle without losing information along the way. This not only streamlines procurement but also lowers risk.
Critical to an efficient and well-organized RFX process is technology. Organizations that use RFX software are able to respond to 43% more RFPs than those without a designated RFP tool; and, they’re able to turn around each response 40% faster. RFX tools can create, edit and store templates with built-in task tracking and workflow management.
[Read more: Request for Proposal (RFP)]
RFX processes are a great candidate for automation. RFX processes tend to have a low level of complexity, are highly standardized, are high volume and have a high handle time. Automating these processes gives procurement teams time and resources to focus on other high-value tasks, while the standardization of RFX’s provide a better experience for suppliers who participate in the process.
How does automation work for the RFX? It starts with creating a requisition. Select a template from previous RFP, RFQ, or RFI events and customize it for an existing need. Then, a tool like Fairmarkit can recommend suppliers automatically. Issue the RFX and send it to those suppliers you choose from the list (and others, if you’re looking to broaden your competition).
Suppliers then submit quotes to the RFX platform, which processes the results automatically. The buyer receives a ranked list and awards the RFX, notifying suppliers through the platform automatically. The supplier receives the result, carries out the agreement and delivers the product. The entire process is seamless, efficient, and saves time and money for both the buyer and the supplier.
RFX is a broad term: therefore, there are other ways to integrate automation into your RFX processes. Automation can be used in RFX software to improve compliance. Suppliers can fill out due diligence questionnaires or submit answers to security questions.
Accounts payable can be handled entirely by an RFX tool. According to Chad McDonald, Director of Procurement and Treasury at The Andersons Inc., a diversified agribusiness, “Automation [is] helping our organizations focus on things that are more strategic, rather than tactical. For example, we have eliminated approximately 80 percent of manual invoice processing for indirect payables because of these tools.”
Likewise, tools like Fairmarkit remove the friction between different RFX processes. If your company chooses to issue an RFQ and an RFP, Fairmarkit can combine both capabilities to provide a central source of information. Structured reports from across both events provide greater visibility into spend, helping procurement teams eliminate wasteful activities. RFX software can also help eliminate inconsistencies between events, helping you build better relationships with your suppliers.
RFX events will be a continued point of focus for teams seeking to cut costs and maximize value. To learn more about other RFX vehicles, check out our blog, The Source.