Vendor Selection process
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The Vendor Selection Process
You’ve identified your business objectives and project requirements, planned your project budget and established a case for it, outlined your product specifications, written your RFP, and evaluated the proposals you received.
Now, it’s time for the last piece in the procurement puzzle: selecting your vendor. Up to this point, every step you’ve taken, from defining project requirements and setting out the in-scope specs to evaluating potential vendors, has involved meetings and documentation. But in the vendor selection process, you’ll put all of these preparations into action. This is your opportunity to make sure that the solutions you’ve evaluated will actually work for your organization.
Vendor selection is to new technology what interviewing is to hiring: so far in the RFP process, you’ve reviewed vendors’ proposals on paper. When you’re ready to start your selection process, you should bring in a chosen few for an interview.
Product demos are a key step in the vendor selection process. At Enginess, we recommend at least three demos per vendor: an initial call and brief demo, a longer demo with key stakeholders, and a technical demo to get technical team sign-off.
Selecting your vendor finalists involves compiling all the information you have gathered to date, from initial business objectives and technical requirements to your last demo notes, and weighing all of the pros and cons carefully.
Below points covers the ins and outs of this process:
Let’s pick up where we left off in the previous chapter. After evaluating and ranking the proposals you’ve received from a number of vendors, you should make a short list of the best proposals. These are the vendors you want to meet in person for discussions and demos.
Sometimes this involves simply ranking the top candidates and calling them up. But in many cases, there will be internal debate and disagreement among key stakeholders about which vendors should actually be at the top of your list.
Sometimes this involves simply ranking the top candidates and calling them up. But in many cases, there will be internal debate and disagreement among key stakeholders about which vendors should actually be at the top of your list.
Keep in mind that many different people in your organization will have to work with the technology solution that is selected: make sure your short list includes only highly ranked vendors who are a good fit with the unique concerns and needs of your project team and your stakeholders.
Bringing in your shortlisted vendors and having them demo their proposed new technology solutions is the most important step in the vendor selection process. Demos give you an opportunity to see whether a proposed solution will work and make sure it can be integrated into your broader technology ecosystem. They also allow key stakeholders to test a proposed solution and get on board with its new technology.
Make sure your stakeholders do their homework. Ensure everyone knows which new technology the demo involves, what business problem it is intended to solve, and why it’s been shortlisted, as well as what you’re expecting each stakeholder to assess.
Keep the demo invite list short. It’s nice to have all of a project’s stakeholders attending, but often a new technology demo looks like there are too many cooks in the kitchen. Keep the invite list as short as possible.
Try to play with the new technology before the demo. If possible, get a preview version and arrange a test drive with some dummy data a week or two ahead of the demo. It will lead to better questions from your project’s stakeholders.
Try to replicate your system as closely as possible. Give the vendor some of your organization’s data, or explain a workflow problem or pain point your project is addressing. The more real you can make the demo, the better.
After you bring in each of your shortlisted vendors to demo the new technology solutions they are proposing, you should shorten your list further, down to a final few. The demos should help you decide which vendors are the right fit for your project and your organization, but the final selection can still be difficult.
At Enginess, during our procurement consulting engagement with global furniture manufacturer Teknion, we identified a short list of six vendors to be considered for a demo. We then shortened the list of vendors further, based on the alignment of their offerings with Teknion’s business objectives and the total cost of ownership.
At this point, one of the most important considerations is making sure you’ve been asking your potential vendors the right questions from the start, so that you have all the information you need to make an informed decision.
An external consultant can provide some guidance and support here, because they have the expertise to know what to ask and when to ask it. And if they’ve been with you since the start of your procurement project, they’ll also know how to discuss your organization’s core business requirements in the context of the larger technology landscape. They can ask your potential vendors questions that get to the heart of your project’s business objectives, using technical language that will generate precise answers.
After seeing all the demos, shortening your list of candidates to a few top vendors, and answering all of those last-minute questions, it’s time to do some decision-making. The way a final decision will be made is different for every organization, but it often involves comparing prices, thinking through delivery times, and considering any security issues.
You can choose to crunch these numbers and do this final analysis on your own, or you can bring in an external consultant to help achieve greater certainty.
And that brings us to the end of the RFP process. At this point, the last step in your new technology procurement project is to lock in your vendor, start your purchasing arrangements, and sign those contracts. But that’s a whole other book!