RFx Factories: Luxury or Necessity?

RFx Factories: Luxury or Necessity?

RFx factories are virtual support teams that configure and manage eSourcing events for corporate buyers. Outsourcing these activities to service providers is standard practice amongst large corporations. Although the hassle-free access to skilled workers and reduced labor cost is attractive, there are some challenges to overcome as well.

Are RFx factories luxury or a necessity? Let’s find out. We’ve witnessed the RFx Factory model work well in the following situations:

-Decentralized procurement organization: RFx factory supports small teams of local buyers

-Knowledge of new technology: RFx factory supports both old and new technologies

-Aggressive demand for support: Organizations with seasonal patterns for RFx support or other procurement activities

-Business continuity: Temporary replacement of in-house staff that take time off work

-Language capabilities: Support RFx’s in foreign languages

We have seen some challenges too:

-Agility: Difficult to perform last-minute changes

-Higher threshold: Buyers prefer hands-on support from a person right as his/her desk

-Know-How: Buyers do not learn and utilize the full capabilities of eProcurement technology

-Complexity: Managing events becomes more complex as the number of people grows larger

-Business case: The transition of activities offshore often requires an investment that is only regained if successful

A model that we see in many corporations is a Rfx hybrid model with a combination of buyer support trained as key-users plus some form of offshore support. This provides a first tier of local support with an overflow, if needed.

So, are they a luxury or necessity? It depends on your organization’s circumstances. It’s a necessity for a thinly spread decentralized procurement organization. For a centralized organization based in only one country, it may be a luxury. There is not a right answer to this question.

If you are looking for the top of the line in eSourcing Tools, then contact ProRFx to help with how your procurement is taken from start to finish.

About the Author