Many companies bring in outside vendors when they have large-scale projects. There are many reasons for outsourcing the work, including lack of staff, lack of resources and lack of expertise for the project. When choosing a perspective vendor, a business often sends out a Request for Information or Request for Proposal. Before deciding which type of tool is best for your organization, consider the differences between the two.
Requests for Information, or RFIs, are planning documents. They are informal documents and do not usually require commitment from either party. RFIs are designed to collect information about the prospective vendor’s company, capabilities, skills and experience. Project details and budget typically are not included in this type of document. The only time this type of information is included is if the company is looking for a short-term vendor for a small project.
Requests for Proposal, or RFPs, are complex documents companies create to attract bids and proposals from outside vendors. An RFP typically includes the project’s budget, timeline and criteria, as well as the company’s goals and objectives. It focuses on the specifications and scope of the project, and it works to solicit a detailed response from potential vendors. Vendor replies usually include information about the vendor company, proposed price and specific details of how the vendor will execute and manage the project.
The RFI is typically used alone for low-budget projects, and as a starting point for high-budget projects. It usually takes several weeks to send out and receive responses for this type of document, and typically is less than 10 pages. The RFP is used for high-budget projects, and is commonly created at the end of the information-gathering phase of the project. It usually takes several months to send and receive vendor responses with this type of document, and it is usually at least 20 pages or more.
Using an RFI is advantageous for small, low-impact projects. This document does not require much time or effort from potential vendors, as they do not have to send back long descriptions of project details. Companies therefore use this type of document to learn more about the scope of a large project before beginning the proposal process. The benefit of an RFP is that it prepares the company to move forward with a vendor and begin the contract phase.
The downside to an RFI is that vendors may not be interested in sending information because they do not see the implied commitment from the company. The disadvantages of the RFP are the time-consuming preparations needed to send it and receive it. If a company is uncertain about the overall scope and specifications of the project, writing the RFP may be very difficult or may result in unpredictable vendor proposals.