ERP RFQ, RFI and RFP: Mastering those vendor selection acronyms
The abbreviations RFI (request for information), RFP (request for proposal), and RFQ (request for quote) represent documents that will serve as milestones when you are choosing an ERP vendor. Regardless of your ERP team structure, make certain that someone from procurement helps your team create effective RFI, RFP, and RFQ documents.
ERP Request For Information (RFI)
The purpose of an RFI is to provide relevant written information about an ERP vendor of interest. In essence, this is a business biography, which explains who the vendor is, and, if the RFI is well written, also conveys a sense of the company’s values, and what it stands for. You may have to read between the lines on an RFI, not only at what is said, but what is not said. Every ERP vendor wishes to put their best foot forward, without being misleading. As such, they are reluctant to simply say “no” to any of your questions. For instance, if your RFI asks “Are you ISO certified?” you may get the straightforward answer of “Yes, we have been certified for six years,” or a pretty strong answer of “We plan to be certified by September of this year”, or a weak answer of “A team has been assigned to prepare us for certification.” You may even get a lengthy explanation of what their alternative approach to ISO is, but it will be rare for anyone to simply answer the question “no,” even though it is a yes/no question.
ERP Request For Proposal (RFP)
After examining the RFIs from ERP vendors it should become apparent that there are a few front runners, who seem to speak your language and be aligned with your issues. These front runners will be further investigated, and pared down to a short list. The candidates for your ERP vendor short list move to the next phase of evaluation, and should receive an RFP – request for proposal. The RFP is structured around the list of several hundred items assembled during ERP requirements gathering. Once vendors have the RFP in hand, serious conversations ensue, as vendors seek to understand the requirements better. Beware of an ERP vendor who is not familiar with any of the issues on your 'hot' list; they probably do not have any hands-on experience with your set of problems.
Recommended Reading: ERP Software RFP Guide - Ensure your ERP RFP reflects the needs of your business
ERP Request For Quote (RFQ)
From the RFPs, you will assemble a final list of two to five candidates. At that point, you will issue an RFQ – request for quote – in which each ERP vendor specifies all of the financial conditions to provide the proposed solution, including initial licensing costs, annual maintenance costs, payment terms, etc. Be courteous to your vendors; if you have no intention of selecting them under any circumstances, do not waste their time by asking them to prepare an RFQ for a complex ERP solution.
There will be an enormous amount of words said by many different people during the ERP software selection process. Having the written documentation acquired from RFIs, RFPs and RFQs will be hugely beneficial to keeping the process fact driven as much as possible.
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