In many cases, companies outsource their IT needs to third party vendors. Unfortunately, the vendor selection process is usually haphazard. This results in long-term misalignment and frustrations from both ends. The end result is a broken contract and having to find a new vendor.
Going through the right vendor selection process from the start can save you a lot of hassles in the future. We’ve developed 7 helpful tips on vendor selection to guide you on your quest.
1. Know What You Want
Before starting to look for vendors, understand exactly what is it you want to outsource. Create a team that will lead the selection process and have them sit down and write out what it is that your company needs and what are the technical or business requirements.
Result: This will help you communicate your needs easily later on.
2. Coin Your Ideal Vendor
After you’ve defined what you want for your company, it would be good to make a list of things you want your vendor to be. Is it important that they are local? Do you need a particularly flexible vendor? What are the features and characteristics of the ideal vendor for your needs?
Result: This will help you create a more targeted approach and short-list vendors later on.
You have your needs, you have your ideal vendor, now go out into the world and find him. Compile a list of all the possible candidates and send them the list of your needs (you developed this in step 1!). Based on the replies you get, and the information you created in step 2, short-list the vendors as much as you can.
Result: You will have a list of qualified potential vendors.
4. Set Priorities
In the list that you created in step 2, prioritize the qualities you had written out to see what’s most important and what’s least important. Then rank the vendors you’ve short-listed accordingly. This will help you identify who’s better fit for your needs.
Result: You will be able to weed them out further and zone in on the best fit for you.
5. Set Up a Meeting
At this point, you a maximum of 4 or 5 candidates in line. This the time to set up meetings with them to brief them more thoroughly about your needs. Ask them to provide a proposal stating the solution overview to your current business and technological requirements, fees, benefits, etc.
Result: You’ll have a clear understanding of how they intend to meet your needs.
6. Select Your Top Two
After receiving and reviewing the proposal, identify your primary and secondary options for vendors.
Result: You’ll have a clear idea of who you would like to work with ideally, as well as an excellent back-up plan should things not work out like you hoped.
7. Negotiate a Contract
Sit down and identify all the elements of your partnership and agree on deadlines and deliverables. You’ll need to brush up on your negotiation skills for this part. Remember to always ask for what you want and know where to draw the line. If everything works out, don’t forget to ask for a written contract for you to review and sign.
Result: You now have the perfect vendor for you!
Do you have interesting stories with your own vendor selection process? Share them with us in the comments section below.