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The vendor selection process can be an arduous, time consuming, and stressful task. Receiving quotes that run the gambit of the budgetary spectrum, deciding which product will give your company the biggest bang for the buck and wondering if saving a dollar or two is really worth the frustration of finding the “right partner”. Every Project Manager has dealt with these issues, but keeping in mind the following points may provide some clarity and assist with narrowing the decision-making process when seeking a value-added business partner.
- Prepare a well defined project scope
- Create a list of requirements. Ensure all aspects of the project are being captured. Alignment and agreement within the organization must occur first and foremost.
- Project Scope must outline all roles and responsibilities.
- Establish all high level deliverable dates and the associated milestones for the project.
- Sign-off from the Executive sponsor of the project must occur at this stage.
- Gather a list of recommended vendors and interview each. It is critical that the following points are addressed during the interview process to ensure that the vendor(s) have the resources available and the knowledge to deliver a final product that aligns with the project scope.
- It is important to determine the level of experience that the consulting team exhibits.
- Request resumes for the consultants on staff.
- Inquire as to the specific projects these consultants have worked to qualify the expertise that exists.
- Do they have relevant industry experience?
- Speak to them about a “proven approach” to a similar project and how they were successful in delivering in a timely manner.
- How many dedicated and part-time resources are available?
- What involvement (if any) is the customer expected to contribute?
- This is key in determining not only the resources that your organization will need to dedicate, but will also have an impact on the billable hours being allocated for the project.
- Keep in mind, having an internal resource dedicated to the project is a great way to leverage the “hands-on” experience as a training mechanism. In addition, these employee costs can be capitalized, reducing the expense budget.
- Does the vendor’s Project Lead have a Business or Finance understanding or does this person strictly possess a technical background? Depending on the direct involvement of the business users, this is an important issue that needs to be considered.
- Have a thorough understanding of how your organization is going to be billed.
- Understand how your organization is going to be billed and at what milestones.
- What is considered as reimbursable expenses at what percentage is this “capped”?
- Request three business references in which the vendor has successfully implemented a similar product. It is acceptable to ask for examples, or a letter of recommendation from former or current clients.
- Depending on the result of the interview stage, make a request of the vendor to develop a proof of concept. Compare this document to the original project scope
- Does the Proof of Concept support the Project Scope and required end result defined by your organization? Ensure that all key deliverables are being met.
- Ensure that the timelines seem reasonable. Do they align with the deliverable dates of your organization?
- Don’t hesitate to challenge the methodology or the approach being used by the prospective vendor.
- Compare the approaches of the different vendors – It is important to keep in mind that you are the subject matter expert, push back on what does not seem reasonable.
- Negotiation
- The lowest price does not always constitute the best solution. However, staying within an allocated budget is important. Do what is fiscally responsible for your organization; do not sacrifice quality or functionality just because a vendor comes in with a significantly lower price. It is important to deliver a product that is going to meet the expectation of the sponsors.
- It is important to understand what level of post-implementation support, training, and maintenance is included. This can be used as a key negotiation point.
These high-level items touch on a number of areas that should be considered during the vendor selection process. Of course, there are a lot of other aspects that may need to be considered for your organization which go beyond the areas addressed here. Be resourceful. Don’t hurry off to start a project without doing your due diligence by investigating and selecting a firm that fits your needs. The results of a good implementation can change the way a business functions, the remnants of an implementation that is not successful can have even longer effects
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