One of the most common business tools used is RFP – request for proposal. Although, as I mentioned, it is considered one of the most popular tools, many still don’t know what it is. If you are one of the curious detectives, researching your way to find more about RFP, you have come to the perfect place.
So, since you’re here, let me brief you what you’re about to read today. First, we’ll go on in simple details what RFP really is. We already gave away what it stands for, but there is much more to it, as in its terms, how it works, and who uses them. In another blog, to understand more we’ll go over how an RFP works, what the processes are and when it is best to use them. Finally, we’ll end our blog with a celebratory dance because we all learned something new today!
First and foremost, let’s start with the definition of today’s acronym, RFP to be exact. A request for proposal is a formal document that includes the summary of an organization’s purchasing products (or services). By this, it is obvious who issues the RFP – the buyer i.e. the organization. The purpose of an RFP is to provide the potential vendors some background information about the organization’s wants and needs. Vendors, in return, submit a proposal (which is in response to the offers set by the organization) and try to show the organization why buying from them is the best decision they can make.
So, to make it even simpler, there are 3 steps:
- The buyer issues the RFP
- The vendors submit an application and tries to persuade the issuer that they can meet their needs
- Finally, the issuer selects the best qualified vendor i.e. the winner.
See, I told you we’re going make it as simple as possible. Easy right?
Now for the second part, lets talks about some RFP terms.
- When a vendor submits a proposal, it is an organizations responsibility to check the qualification and whether it meets their needs. RFQ as in request for qualification can be used in order to get to know, in details, the vendors’ experience and expertise.
- Another RFQ can be issued that provides information about the prices and payment processes. However, this RFQ stands for request for quotation.
- Another term, BRD- Business requirement document, outlines what goals the organization wants to achieve while partnering with the vendor.
Do you remember the dance I told you about a few minutes before? Yes, it’s time. Dance your way to Coloco (where many other blogs like this are found) like no one is watching because honestly, no one really is!