So, you've done your initial market sweep - you've spoken to a number of potential vendors to see if they can meet your need. You've then shortlisted to 4 or 5 providers - perhaps you issued an RFI (Don't do it, try this instead...!) or an RFP (Do it only if you have to!) and you then got it down to the final 2. That's where it gets interesting. How do you make the call on your preferred vendor?
We have seen a variety of different approaches - but our view, as we explain below, is to pursue a balanced approach and choose from a selection of:
Perhaps the most frequent path taken at the end of a selection process is to speak to other customers. The holy grail is to find a similar customer to you (e.g. a retailer in the footwear area) - but we'd caution against this. The likelihood that your shortlisted vendor has a customer reference in your sector - and in a very specific niche, is unlikely. It either means that you are late to the party (and your competitor got ahead of the game) or the sector is pretty large and everyone is using it! Also, there is a fair chance that the reference will not be allowed to speak to you if they are indeed such a close match to your needs.
Our view would be to speak to a number of different customer references - this is far more useful than one high-profile competitive reference. We would also recommend using your network or a third party to arrange those calls so that they are completely independent.
Internal Scoring Exercise
Another common approach is to open up the decision to a selection of the internal buying team. It's a great way to get a diverse range of feedback - and to make sure that the final decision doesn't rest at any one person's door!
This is a worthy approach. We believe that it should contribute to the decision - but it should not be the casting vote. The team will no doubt have their own reasons for their individual selection, which may or may not be important to the overall need. We also think that an individual - or perhaps a core group of 2 or 3 decision-makers - has to make the ultimate call. Someone has to own the decision at the end of the day.
Executive to Executive Call
This is an important one. Before you sign the contract, form those peer-to-peer relationships. Ensure that someone senior within both organizations has visibility of the project and why it is important to you. Ideally, you want to create an executive sponsor on both sides of the equation. When the going gets tough, they are extremely valuable relationships. Ahead of a vendor selection, you can understand just how much the vendor wants to work with you and how critical the signature is for them as well as you. It can be an important factor in the ultimate decision.
Head to Heads
Look at the vendors from multiple angles. Think about all the areas that you need to assess in a side-by-side comparison. We run a Vendor Head to Head service where we assess the final vendors across 15+ metrics. It is surprising how compelling this is. Take away the emotion from your teams and look at the two (or more) side by side - it can be a real eye-opener.
Which of the vendors is a game-changer for you? If they both were installed and were reasonably successful - which would really move the needle for you?
As a vendor, there is always the assumption that price is the reason that a deal is won or lost - but in so many cases, it has a limited impact on the choice of partner. The price is an important factor to assess. If your preferred vendor is more expensive and if that will lose them the deal - ask them the question. They would rather have the option to address the price issue than to lose the deal.
Take a look at what the analyst community is saying about your selected vendors. This is a great source of information for you as most analysts will look at various aspects of the vendor's business. They will comment upon their market share, R&D investment, customer opinions, commercial challenges and so much more.
Can You Work With Them?
One of the core reasons for a vendor being selected - is the 'can we work with them' test. Do you think they will be a business that has the same values as your business? Do you trust the sales and leadership team? It's one of the key reasons why we hear one partner selected over another. Even one with much higher fees.
What's important to you - may be different from what's important to your team or what's important to another business (within or outside of your sector). It's important to think carefully about your vendor decision but also to not stagnate and get lost in a vendor decision. There are so many ways to make the ultimate call. So many partners are willing and able to help you. The sooner you make the right call - the sooner your business can set off on a path to success. Some or all of the elements above can get you to put some clear daylight between your options.
How do you choose your final vendor?
Find out more about how Viewpoint Analysis can help at the very end of your procurement process with our 'selection support' services.