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Implement a Proactive and Consistent Vendor Selection Process

Formalize your process to eliminate bias and maximize value.

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Contributors

  • Deepak Bansal, Director Vendor Performance Relationship Management, Willis Towers Watson
  • Donald H. Hopkins, Adjunct Assistant Professor, Wright State University in the College of Business
  • Daniel J. Enneking, Founder, Strategic Procurement Partners
  • 2 anonymous contributors

Your Challenge

  • Vendor selection is politically charged, requiring Procurement to navigate around stakeholder biases and existing relationships.
  • The process is time consuming and often started too late. In the absence of clarity around requirements, it is easy to default to looking at price instead of best fit.

Our Advice

Critical Insight

  • Rooting out bias is essential. Establishing a robust, ruthless, but reasonable process is vital to making unbiased vendor selections.
  • Price comes last, requirements come first. Spend time up front to make sure that your key requirements are complete before proceeding with vendor selection.
  • Differentiate business needs from wants. Comparing proposals against each other leads to confusion. Features matter – just not all of them. Matching solution capability to organizational needs matters more. Know your true minimum mandatory requirements vs. nice-to-have features, and compare proposals against your RFP instead of against each other.
  • Price is not cost. Calculate TCO when considering internal and external cost.

Impact and Result

  • Design a procurement process that is robust, ruthless, and reasonable.
  • Take control of vendor communications: set and enforce clear guidelines around contact.
  • Gather a solid set of requirements and make sure they remain the primary focus.
  • Research & Tools

    Start here – read the Executive Brief

    Read our concise Executive Brief to find out why you should optimize your vendor selection process, review Info-Tech’s methodology, and understand the four ways we can support you in completing this project.

    1. Establish and formalize process

    Map your current vendor selection process, identify gaps, and then amend and document the process.

    2. Gather requirements and write RFx

    Begin a specific vendor selection by writing a project plan, then gathering and prioritizing requirements. Next, select, write, and publish your RFx.

    3. Evaluate and select vendor

    Select your evaluation method and framework, then perform due diligence and evaluate pricing. To finish, select and recommend a vendor.

    Guided Implementations

    This guided implementation is a nine call advisory process.

    Guided Implementation #1 - Establish and formalize process

    Call #1 - Map current process
    Call #2 - Identify gaps in current process
    Call #3 - Amend and document process

    Guided Implementation #2 - Gather requirements and write RFx

    Call #1 - Write a project plan
    Call #2 - Discuss and prioritize gathered requirements
    Call #3 - Review your RFx before publication

    Guided Implementation #3 - Evaluate and select vendor

    Call #1 - Select evaluation method and framework
    Call #2 - Review due diligence activities
    Call #3 - Review and validate vendor selection

    Onsite Workshop

    Discuss This Workshop

    Book Your Workshop

    Onsite workshops offer an easy way to accelerate your project. If you are unable to do the project yourself, and a Guided Implementation isn't enough, we offer low-cost onsite delivery of our project workshops. We take you through every phase of your project and ensure that you have a roadmap in place to complete your project successfully.

    Module 1: Establish Vendor Selection Process

    The Purpose

    • Document and refine your vendor selection process.

    Key Benefits Achieved

    • Formalized vendor selection process.

    Activities

    Outputs

    1.1

    Map current process.

    • Documented current vendor selection process
    1.2

    Identify gaps in current process.

    • Gap analysis of current vendor selection process
    1.3

    Amend and document process.

    • Formalized and amended process

    Module 2: Gather Requirements

    The Purpose

    • Write a project plan and gather requirements.

    Key Benefits Achieved

    • Gathered and prioritized requirements.
    • A clear project plan.

    Activities

    Outputs

    2.1

    Write a project plan.

    • Proposal Evaluation Tool
    2.2

    Gather and prioritize requirements.

    2.3

    Write your scenario and use cases.

    • Scenario Template

    Module 3: Write and Assemble RFx Package

    The Purpose

    • Learn about different RFx options and draft a successful RFx package.

    Key Benefits Achieved

    • Complete RFx package.

    Activities

    Outputs

    3.1

    Review different RFx options.

    3.2

    Draft RFx.

    • RFx package
    3.3

    Make a plan for soliciting feedback and publishing the RFx.

    Module 4: Perform Due Diligence

    The Purpose

    • Perform due diligence on candidate vendors.

    Key Benefits Achieved

    • Crucial information and data points gathered about candidate vendors
    • Due diligence completed.

    Activities

    Outputs

    4.1

    Customize a vendor reference script.

    4.2

    Reference Script Template

    4.3

    Review the due diligence checklist and key activities.

    • Due Diligence Checklist

    Module 5: Evaluate Candidate Solutions

    The Purpose

    • Evaluate your vendor proposals.

    Key Benefits Achieved

    • A selected vendor to recommend to management with a formal presentation.

    Activities

    Outputs

    5.1

    Calculate TCO.

    • TCO Calculator
    5.2

    Evaluator’s Guidebook

    • RFP Vendor Response Template
    5.3

    Prepare final evaluation.

    • Proposal Evaluation Tool or Pugh Matrix
    5.4

    Prepare presentation for management.

    • Vendor Recommendation Presentation

    Member Testimonials

    Schedule Analyst Call

    After each Info-Tech experience, we ask our members to quantify the real time savings, monetary impact, and project improvements our research helped them achieve. See our top member experiences for this Blueprint, and what our clients have to say.

    Client

    $ Saved

    Days Saved

    Testimonial

    Lorain County Community College

    $64,743

    N/A

    The analyst completely understood what I was looking for and delivered a sane, to the point discussion on possible approaches. I have not had the time to review any documentation he may have sent.

    St. Lawrence County

    $6,474

    30

    No bad. David is a consummate professional and is walking me through what I need to do for this RFP. It would not get done if not for his involvement.

    Interswitch Limited

    $12,949

    30

    Best: Got price review.

    Renown Health

    $129K

    2

    Scott provided valuable insight into Kronos pricing and suggestions on how to approach them with our requests.

    The Institute of Professional Practice Inc

    $10,000

    N/A

    Best: Gaining insight into good business practices with contracts that I was not aware of.

    Takasago International Corporation (U.S.A)

    $81,291

    7

    This was a great experience to improve our IT procurement! Great benefit to my organization.