Daily Archives: June 13, 2006

RFX Defined

Yesterday we defined a basic strategic sourcing process, indicated there were five critical process-driven phases that may be greatly enhanced by software solutions, and indicated that we would spend one theday discussing each of these phases this week.  Yesterday we discussed Spend Management and Spend Analysis.  Today we are going to discuss the RFX process.

RFX, one of the most generic and overloaded acronyms in the sourcing marketplace today, usually stands for Request For Information (RFI), Request For Proposal (RFP), and / or Request For Quote (RFQ).

RFIs are generally used to identify new potential suppliers or determine if current suppliers are willing or able to supply a new product or service, RFPs are generally issued to interested suppliers who have been pre-qualified as a potential source of a product or service for additional details on the product or service, their processes, and value, and RFQs are generally issued to collect (initial) bids once a pool of qualified suppliers has been determined.

RFX technologies come with many benefits above and beyond simple process automation and sourcing cycle time reductions.  Most solutions will have sophisticated workflow management capabilities, a centralized repository for all project information, best practice templates, survey capabilities, and standardized processes you can base your sourcing process on.

Furthermore, the more innovative technologies will come with supplier portals that will engage your suppliers in the selection process.  Not only will they be able to enter their information directly, but they will be able to offer suggestions and collaborate with you on process improvements and innovative ideas to streamline new product innovation.

When it comes to innovation, RFX is now one of the least innovative technologies on the market, but still one of the most important.  The more time you have to focus on strategic planning versus tactical operations, the more likely you are to spot innovative solutions that will save you bushels of money and increase the overall value of your awards.  RFX was one of the big breakthroughs in strategic sourcing automation – and so was the further introduction of collaborative supplier portals.  The next major innovation will be the integration of business intelligence that will let you discern supplier viability and quality before your first interaction, so you do not waste time screening suppliers already known to be inappropriate to your line of business.

There are a large number of RFX suppliers on the marketplace today, ranging from standalone solutions to tightly integrated solutions like those offered by Ariba, Emptoris, and Iasta.  See the growing company list at for some examples and starting points.