Benefits of RFP
RFP or Request for Proposal is the document sent to various suppliers inviting them to provide proposals for providing services or goods. This document is also known as sourcing project and it is designed specifically for getting suppliers to offer creative solutions to a certain issue or business problem. Further below are benefits of RFP.
1. Informs suppliers
The primary objective of the RFP is basically to notify suppliers concerning your company’s new requirements. It encourages suppliers to do their best in an effort to meet your requirements. The RFP is very specific regarding what products you require using in your venture. Through being specific with your budget and other requirements in the RFP, you will likely receive better bids.
2. Large responses
The RFP document enables for a greater response concerning your wish for outsourcing. It forces providers to identify all your requirements clearly and be more realistic when they present an offer for your RFP.
3. Encourages competition
A chief RFP advantage is that it provides you the chance to alert the providers that the selection process is competitive. The scenario of competitive bidding is usually the best technique accessible for getting the best prices. Apart from good prices, the RFP can help you attain the best services.
4. Effective planning tool
Another important RFP benefit is that if it is well handled, it provides an organization a proper handle with regards to potential risks for complex projects. The firm will comprehend the likely benefits it can gain throughout the project. The RFP also provides project stakeholders and purchasing personnel the capability of visualizing the way a venture will go as well as the method that the providers will use for completing it.
The main demerit of RFP is that they are exceedingly time consuming both for the purchasing personnel and also for the providers.