For many organizations the success or failure of IT initiatives is based on the selection of the appropriate technology vendors. Despite the critical nature of this process, many organizations underestimate the time and effort it takes to make a well-informed decision. Below are some considerations to help your organization simplify the vendor selection process.
Analyze your organization’s business requirements
It is essential to start the vendor selection process with a thorough analysis of your organization’s business needs. What are its objectives and expected goals? What are its technical and business requirements? To ensure a successful outcome, it’s necessary to organize an evaluation team. A key task for the team is to define the high-level requirements of the outsourcing engagement. The evaluation team must be able to be able to:
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Define the product, material or service that is needed;
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Define the Technical and Business Requirements;
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Define the Vendor Requirements, and
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Publish a Requirements Document.
Vendor investigation & assessment
Another key activity in this process includes assembling a list of all the potential vendors. Be sure to take into account the financial state and stability of the vendor, installation and integration support, training/education, maintenance agreements, upgrade and enhancement policies, customer service reputation and budget considerations.
Request for proposal (RFP)
Once the potential vendors are identified, a request for detailed proposals from each vendor should be issued. An RFP document should contain sufficient information to permit the vendor evaluation team to assess each vendor’s ability to meet the organization’s business needs. The RFP needs to be focused on areas like quality, financial security, business background, terms and conditions and partnership approach. An RFP should contain the following elements:
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Introduction and Executive Summary;
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Instructions to the vendor: Mandatory structure of the proposal that will be submitted, proposal language, contact for questions, deadlines and
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Business and technical requirements described in a way to ensure vendors can present their solutions in the best possible manner.
RFP evaluation
Evaluate the vendor RFP responses to determine the one that best meets the organization’s business needs. Conduct a thorough investigation by obtaining input from all stakeholders. Before reviewing and evaluating the responses of the vendors, build an evaluation sheet based on the RFP. By weighting each of the criteria and evaluating each vendor’s response against these criteria, the organization will obtain a total score per vendor.
Below is an example of Scoring Rules with Suggested Weights, Rates, and Points: Legend
Scoring Calculation: Application weight X rating x vendor response points = point score for a requirements document criterion
Select the vendor
Formulate a total performance score from all the RFP’s and identify the winning vendor as well as the runner-up in the event a contract cannot be reached with the winner. The final stage in the whole process is contract negotiation. This includes signing a contract that clearly outlines the services to be delivered by the vendor, the performance measures and SLA, vendor team members, project pricing details and overall quality of work standards.
The Litcom Approach
For clients making new hardware and software decisions, Litcom provides independent advice and assistance. We have assisted our clients in evaluating and selecting enterprise wide business systems, as well as solutions for specific industry verticals, best of breed software applications and the hardware and network infrastructure required to support their business.
Litcom starts with defining our clients’ unique business and technical requirements. In gathering requirements we not only look at the way you do business at present but also help you see possibilities of process improvement with the assistance of our experienced professionals. We then compare these established requirements to the capabilities of alternative vendor solutions.
We help our clients’ progress through the various selection stages from development of requirements to vendor evaluation and contract negotiation, thereby greatly accelerating the process of vendor selection. For more information please contact us at: [email protected].
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