eSourcing and eRFx: Procurement terms to know
Remember the days when you asked for information from a vendor and they would send you a slick brochure? Some in fancy packages, others oversized (so they stand out). When you asked for a proposal, you’d get a 30-page bound book while others emailed you a PDF, or you got invited to a private page on their server to access the information.
For some of you, that was back in the day. For others, it’s business as usual, and very frustrating to deal with the disparate collection of information in different formats. It makes side-by-side comparison difficult; sometimes tracking the information down can take time (depending on how organized you are). The adventurous few might enter key information on spreadsheets to better compare and make decisions. But that’s a lot of hours if you start multiplying the projects companies face daily.
Often times, organizations don’t think they need a procurement software solution, because they don’t think they’re big enough. The reality is that these software systems help companies to be more efficient by saving time and money. Your company’s size is not indicative to how much you’ll save. Today, many vendors are familiar with and prefer an eProcurement process. It makes it faster to respond and everyone can get more done—whether you’re on the buy side or sell side. eProcurement simply puts everyone on the same platform for easy reference.
If you’re using an eProcurement system already, we invite you to comment and share how it has transformed how your team works. If you’re still doing procurement “old school,” here is a primer to help you get up to speed.
Did you know that utilizing eSourcing, and eRFx will ultimately help business owners make the most informed decisions in their strategic sourcing initiatives? eSourcing is a method of sourcing where all supplier data and bids are collected through one central software portal, so that the procurement team can see in one place all the information they need to make sourcing decisions. eSourcing shows procurement professionals all their options at once, helping them make their operations more efficient, get the best possible product, and cut costs. Adopting progressive procurement processes allows companies to streamline operations and optimize their supplier relationships.
These acronyms, the building blocks of any eSourcing program (and sourcing program in general), are essential to understand. While some are interchangeable, others are quite different depending on the stage in the procurement process:
- eRFx: Electronic Request for (x)
- RFx: Request for (x)
- RFI: Request for Information
- RFB: Request for Bid
- RFQ: Request for Quote
- RFP: Request for Proposal
In procurement technology eRFx stands for electronic request for (x), where the x represents a proposal, bid, quote, or information. A software system that manages eRFx activities will allow companies to work efficiently with their network of suppliers, ask questions and survey results, and calculate data for various hypothetical outcomes, all within one centralized portal for easy comparison. RFx, on the other hand, is a more general term for request for information and, according to Sourcing Innovation, “is one of the most common acronyms in the strategic sourcing and procurement landscape.” RFx encompasses RFIs, RFPs, RFBs, and RFQs, whether within or outside of an eSourcing platform.
“Sourcing Innovation” goes on to say that “The RFx process is probably one of the most difficult e-Sourcing processes to define as it can range from a simple one-time RFQ to a complex multi-stage RFI / RFP / RFQ process, depending on the needs of the project.”
Given the complexity that can be involved in the eSourcing process, it’s a good idea to provide sourcing professionals with critical tools to optimize supplier relationships and streamline the purchasing process. In the end, it will create more savings for the companies. Contact us today to see what our SmartSource® software — as well as our full Source-to-Pay, Order-to-Cash, and AP Automation solutions — can do for your team.