vendor selection

Simplifying Vendor Selection Process

Contemporary companies rely on outsourcing for success in today’s competitive marketplace, and selecting a vendor is now as important a process as developing new products.
Products and services are selected for cost, requirements, overall quality, stability of the supplier, time-to-market and traditional partnerships. The purchase approval process often involves more than one criteria and one opinion and requires the establishment of a broad-based team to manage the process.
Creation of a repeatable evaluation process is critical and development of a process that works for your company is not as hard as many think. It’s worth the time and effort and can be broken down into a four step approach that will allow selection of the right vendor for the job.
The key to a successful cost-based evaluation is that the product or service in question is an undifferentiated offering (e.g., long distance phone service). When evaluating offerings that can be differentiated, it becomes much more difficult to find a company that offers a solution that is clearly superior along all dimensions your organization would like to consider.
In these situations, cost is joined by other evaluation areas such as: functionality, ease-of-use, company history and financials and value-added services.
A Four-Step Plan
Sophisticated product and service evaluations can be accomplished in four steps:
 Evaluating Business Needs
 Request & Assess Offers
 Vendor Interviews & Proof-of-Concepts
 Negotiation
Step 1 - Evaluating Business Needs: This is where you ask the tough questions that drive the execution steps in the successive steps in the process:
 What need you are looking to satisfy?
 Which evaluation categories you will use?
 What are your business, technical and usability requirements?
 How you will roll your evaluation into a scorecard?
The evaluation team should be made up of representatives from all of the key