How To Run a World Class Vendor Selection Process

Vendor selection can be tricky. It can be expensive and it also can be time-consuming - extremely time-consuming. In this article, we set out the steps that you need to take to run a world-class vendor selection process. That's right, not just average - but the best vendor selection that you can possibly achieve! Quick. Efficient. Transparent.





Benefits Of A World Class Selection Process


If you follow these steps, your selection process will be a huge success. What do we mean by that? Well, it will deliver the following results:

  • You will get responses from all of your key suppliers.

  • You will carry your team with you.

  • The process will feel quick and easy.

  • Suppliers will be happy to engage and will work with you again.

  • You will get suggestions and ideas - not just responses.

  • You will form a partnership with your preferred supplier.

The results really will be so much better than average. So, here it is, the simple way to ensure that your vendor selection process really delivers for you, your project, your company, and your suppliers.


1) Lead With a Problem Statement


How many times have you seen or issued an RFI or an RFP and it's all about what you (or the procuring company) want? It tends to contain a series of requests - both in terms of the preamble and instructions to the vendor, but also in the thousands (!) of questions that nearly always accompany such a document.


It's worth asking yourself one important question - who do you think knows more about the technology or solution that you are looking to implement? You or the vendor? The odds are that the vendor knows far more than you and your team. They did build the technology - and they will likely have implemented it many times before. So, before you issue a request for a specific solution, why not issue a 'problem statement'? Why not simply state the problem that you are looking to solve, and ask the vendors how they might solve this problem. It's sure to bring lots of different ideas and approaches that you may never have thought of.


2) Cast Your Net Wide - But Only In Your Initial Market Sweep


You should only be issuing your RFP or running your formal selection process with your preferred vendors. The companies that really do stand a chance of becoming your chosen vendor.


However, in the early stages, when you are looking for what's available on the market, you should cast your net wide. Look at all the available options. The big vendors, the small vendors, and those that are doing something a little niche. Why might you do this?

  • If you don't look at all the options, how will you know what good looks like?

  • One of those suppliers is going to be your partner - so let's make sure you have looked at all the alternatives.

  • This is the stage to issue the 'problem statement' and listen to how the vendors will solve your issue. Ask away - and listen carefully.

This is much like a blind date - you need to assess what's available before you decide to go on that next date! When we work with vendors, we call this the 'Project Matchmaker'. We write up the problem statement and we then go and circulate that across the market to get the attention of the vendors. It's perhaps the most crucial step in the IT selection process - if you miss any vendors at this stage, you are in trouble.


3) Issue Your RFP To The Select Few


By now you will have seen all the options that are available to you. If you did the first step of the process well, you will have a few good options. In our experience, it's highly unlikely that you will select the 5th or 6th best option - so we encourage our clients to select only four vendors to go into the final step of the IT selection process. By keeping the numbers low, you will:

  • Encourage the vendors to continue with the process knowing that they have made progress and are down to the final few. Let them know that they have made the final cut.

  • Reduce the number of meetings, calls, and overall hassle associated with maintaining a number of vendors in the crucial final stages.

  • Benefit from the extra time that you can spend with each vendor - getting deeper into the businesses and their capabilities.

4) Streamline The Process - It Should Only Take Weeks, Not Months or Years


A fatal mistake made by so many businesses is letting the vendor selection process go on and on indefinitely. The business need is likely pressing - so why do so many IT procurement processes take so long to reach a conclusion? It's crazy because:

  • You risk losing funding.

  • You risk losing the interest of your business sponsor(s).

  • You risk losing your key suppliers along the way as they lose interest.

  • You forget why you were doing it in the first place!

  • Business priorities change.

So...a lot to lose by delaying the procurement process and adding too many hurdles and extending those timescales further than they should be. Why not look at streamlining the process? Our Rapid RFP Process does just this and aims to get to a solution in weeks - and we do it by streamlining as follows:

  • Only issue the RFP to a maximum of four vendors.

  • Limit the number of questions in your RFP questionnaire - do you really need so many?

  • Keep the RFP document short and punchy - again, look at problem statements if you need to.

  • Invite the vendors to the same call (e.g. one kick-off call with all the vendors and one Q&A call with all the vendors attending). This cuts down the need for truncated diary appointments that can stretch over weeks.

  • Make the responses easy - allow them to be submitted electronically. Remember, the harder it is to respond, the longer it will take for the vendors to assemble a team and submit their final RFP document.

  • Give your vendors early warning of the dates for the various calls and submissions so they can plan ahead and will not need to arrange future sessions.

5) Be Transparent With Your Vendors Throughout The Process


Vendor issues tend to always be associated with a lack of clarity, transparency, and timely communications. If you are to run a world-class vendor selection process you will need world-class transparency. Keep the communication lines open. Let them know your expectations. Tell them if there are bumps in the road. Be clear on the next steps and timelines.


6) Score The Vendor Selection Properly


When it comes to the final vendor decision, it's important that you score the selection properly and make a considered decision. What do we mean by this? Well, you need to make sure that you:

  • Gain the support of all your team (or as many as you can) so that they understand why the decision is being made.

  • Be able to justify your vendor selection to anyone who asks - from your CEO to your new project manager.

  • Can clearly express the decision in your funding request.

  • Can articulately explain the decision to the losing vendors.

How do you do this? We conduct a 'Vendor Head-to-Head' report and you can do something similar. In our process, we help customers to gain an impartial viewpoint on the vendor decision by simply comparing the vendors head-to-head across a number of core metrics. It's a great way to visualize the decision that needs to be made.


7) Partner With Your Vendors


The vendors in your IT selection process should feel like your partners. They should feel like they are on a mission to help you tackle an issue. No technology sales team wants to feel like they are just cannon fodder or answering questions all day long. They want to contribute and they want to help. If the decision goes against them in the end, that's life. They want to feel like they know you, know your problem and have put their best foot forward to try to help you.


Remember that when you do select your vendor - you want them to carry this love and support with them into the project. IF they have just been through a war and have been treated badly, do you think they will want to be super helpful in the deployment phase?


8) Deliver On Your Commitments


You will likely set some aggressive timescales and clear commitments for your vendors to meet along the way. If they fail to hit those deadlines there will be consequences. It's important to maintain those high standards too.


If you commit to making a decision on X date - make sure that you do that. If you will commence a new step in your selection process on Y date, make sure that you do. If something occurs to throw the timescales, communicate this openly and early.


9) Dedicate Time To Explain Your Decision


At the end of the process, make sure to dedicate the time to thank all the vendors that entered your IT procurement process and give them adequate time to understand your decision. This is so often missed - and can be crucial for the reputation of the buying company and also it's just a professional thing to do. If the vendors have devoted time, energy, and expense to try to do their best for you - make sure to pay this back by holding a 'loss review' or similar. Explain your decision (if you have followed the steps above you will have a solid case to explain why they lost) and end things in the right way.


Conclusion


An IT procurement process and vendor selection need not be difficult. There are some basic rules to follow and we hope that this article has helped to explain how you can simply run a truly world-class vendor selection process. It need not be hard - and it definitely need not be a process that covers months and years. Remember these words and you won't go too far wrong:

  • Agility

  • Partnership

  • Streamlining

  • Transparency

  • Professionalism

  • Ease

We do this for a living - we act as Technology Matchmakers and run vendor selection processes. We've also been in sales for decades and have seen this first hand. We also conduct 'Win Loss Analysis' for vendors and ask customers why they didn't buy - so we've seen what works well and we know what doesn't - on both sides of the buyer/seller equation. Good luck and let us know how we can help!