RFI Vs. RFP Vs. RFQ – What are The Key Differences?

Nowadays, enterprises seeking to switch immigration providers have more options than ever before, and often check a large number of traditional and hybrid models in order to find the best model in terms of service, technology, costs, employee experience, etc.

In the procurement process, the following terms are often used: RFP, RFI and RFQ. Although all these requests seek information about suppliers, they are not interchangeable. Understanding the differences can help companies and organizations determine the type of request that best suits their needs when choosing a new provider.

It is clear that a wise investment in enterprise software can increase the productivity and profitability of its business. However, the complexity of enterprise solutions such as customer relationship management (CRM), supply chain management (SCM), and enterprise resource planning (ERP) require a truly rigorous approach to the software selection process. In fact, Preparing a Request For Proposal (RFP) helps organize software requirements in order to achieve specific business goals and clearly communicate these requirements to the software vendors whose products you are considering.

Through this blog, we will clearly explain and develop as well important details about RFI (Request For Information), RFQ (Request For Quotation), and RFP (Request For Proposal) including their purposes, ask style, and advantages that simplify these complex but important processes.

Understanding the subtle differences between similar terms in the industry is undoubtedly critical to creating effective processes and procedures. For instance, in many cases, especially in procurement, there are a series of terms and acronyms that have similar meanings but are very different. For example, the processes of RFI, RFP, and RFQ are similar, but they are completely different from each other as shown in the image below.

RFI vs RFP vs RFQ 

Request for Information (RFI) :

It is used when we think we know what we want, but we need more information from the supplier. This is the official means of obtaining general information from suppliers. It is also an introduction in supplier management. RFI is able to provide you with a general overview of supplier profiles. According to TechTarget, “An RFI is typically the first and most broadly cast of a series of requests intended to narrow down a list of candidates.”

Request for Proposal (RFP) :

Commonly used for problems that we detect, this is the most formal one in the "request" process, with strict procurement rules for content, timeline and supplier response. RFP is also a structured way to obtain specific supplier information. It allows you to specify the problem to be solved and invite suppliers to propose solutions. According to Hubspot, the RFPs “give you a sneak peek into different strategies you may not have considered since each vendor will include their own unique action plan along with their bid.”

Request for Quote (RFQ) :

When we know what we want but we need information about how the supplier meets our requirements and/or how much it costs, we usually use a request for quotation (RFQ). It is a sort of requests for price and payment information for highly specific solutions. According to Investopedia, “When the soliciting company knows the exact number or type of product or services it desires, it customarily uses an RFQ. Typically, companies use an RFQ when products and services are standardized, or off-the-shelf".

Below a graphic that shows the differences:

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