The Role of Artificial Intelligence in Making the RFx Process More Efficient, Competitive, & Transparent
If you think procurement is all about RFx request management (Request for price, information, proposal, etc.), then you are wrong. There is a lot more to successful sourcing than just preparing and sharing RFPs. Having said that, collecting information from potential suppliers demands a comprehensive range of intricate requests and questionnaires. This process of gathering information and helpful insights from suppliers is called request management and is extremely important for procurement managers.
What is RFx, Though?
RFx is a term usually utilized to define a variety of requests made by the procurement team. Selecting the right request for your business is crucial as it is dependent on your end goal. You can start the process by having productive discussions with your procurement team and stakeholders to define goals and how to achieve them.
For instance, if your enterprise wants to get a basic understanding of your supplier’s goods and services, you can send them a Request for Information (RFI). In most scenarios, this is the first step procurement teams use in their RFx strategy to get an idea about their supplier’s capabilities.
A Request for Information is an insightful tool to bring new suppliers on board for a new project, assess the market for better and more efficient suppliers, and now, filter the suppliers who met your requirements for the next phase of your strategy.
How does the RFx process work?
First, a Request for Proposal (RFP) will be sent to the filtered or shortlisted suppliers, requesting a suitable and effective solution for certain problems. This will allow the suppliers to place bids on your services and products. Once the suppliers are done with the bidding process, as a procurement team, this request lets you evaluate your suppliers’ skills and capabilities.
When it comes to standardized goods and services, a Request for Quotation (RFQ) is the easiest and simplest approach. Once you figure out what exactly you want from your suppliers, you can then provide them with a precise list of all goods and services. Upon receiving the description of items you need, interested suppliers may then bid competitively. By offering your requirements and giving every supplier the same timeframe to submit their respective proposals, you let your potential suppliers know that you are a fair customer.
Upgrading the RFx Process
The whole request management has a wide effect on your enterprise and honestly, it deserves more credit than it usually gets. Recognizing the value of request management to your enterprise begins with reframing the way you think and talk about the process.
Building Value-Driven Partnerships
Gone are the days when people used to consider procurement as a roadblock. Over the last decade or two, with the rise of strategic sourcing, the procurement teams are more focused than ever on choosing the right suppliers as their partners. With the business objectives and goals, it is recommended to engage stakeholders in this process and convey the useful insights and additional value that your purchasing process comes up with.
Risk is not something we can 100% control especially when it involves 3rd-party relationships. And this is something that most stakeholders tend to forget easily. Thankfully, the precise list of your requirements combined with efficient supplier risk assessments will significantly minimize the chances and severity of potential threats that may come your way through your supplier. Considering the worst-case scenario, such potential risks lead to bigger consequences including loss of profit, damage to brand reputation, and possible litigation issues.
Delivering Intelligent Data
The next time when you share content related to request management, don’t think of it as a bunch of answers, think of it as valuable data cause that’s exactly what it is. As day by day procurement technology is moving on an upward trajectory, purchasing software will greatly take advantage of request management automation, artificial intelligence, and machine learning. Tools like these are created to enhance the effectiveness and efficiency of the sourcing process. And, data from supplier information requests will fuel them.
How does AI make Gainfront’s RFx process more efficient, transparent, and competitive?
Just like any industry, even in procurement, Artificial Intelligence is all about making use of large volumes of data to make accurate predictions about a new, not yet happened, datapoint. The wonderful element of AI is that it tends to learn and enhance as the volume of historical data gathered increases. For eProcurement software companies like us, this means leveraging huge volumes of proprietary data and information that exists on our platform about previous RFxs to make accurate predictions for a new RFx. This automated process will assist in connecting both the procurement teams and suppliers with each other. Given the number of suppliers present on our platform, we see it as an essential tool as the wide network of suppliers will greatly be used, enabling smart discovery between enterprises and vendors to grow.
As the AI continues to enhance its functionalities, as it learns to understand the customer requirements better, its execution in Gainfront’s platform over the last few months is only the beginning of its true capability. We are currently utilizing our customers’ feedback as crucial pain points, and the places at which we can improve our customers’ RFx process to deploy AI technology more effectively.
AI helps enterprises with smooth RFx communication and transactions across the supply chain, creating a more straightforward and sustainable future. As we said, we are always open to considering your feedback and thoughts.