Best practices in vendor selection

Best Practices inSoftware Vendor

Selection

Dan Miller, Advantiv Solutions

www.advantiv.com

Delivering cloud-based Plan-to-Procure since 1997.

About Advantiv

Started in 1996

Product: DecisionDirector® - Stakeholder collaboration and RFP response collection and analysis tools

Mission: Reduce the time, cost, and risk of technology and services planning and procurement while increasing stakeholder satisfaction with the process and the outcome

Experience: 200+ projects in Higher Ed, State & Local, DoD, and Healthcare involving 250+ entities, 250,000 stakeholders, 200+ vendors, and dozens of consulting firms

Agenda

• Lessons Learned in Vendor Selections– Best Practices– Vendor Perspective– Common Mistakes– Great Advice from Peers

• Emerging Practices

Lessons Learned

• Vendor Selections are like family vacations (with in-laws – all of them)– A lot of people are affected, most won’t want to go– Some will be happy and some won’t be– You probably don’t want to be in charge, but knowing

you, you will be• The best selections are well-planned IT-enabled

business projects that yield much more than a chosen vendor

• There are good techniques but no good short-cuts

So, How Did The Selection Go?

These are Business, not IT, Projects

• Gartner CIO Agenda Survey – Since 2005, #1 senior management expectation of IT is “Improving Business Processes”

• The most successful projects are “Business-driven/IT-enabled”

• Clear support of strategic objectives and a strong business case for the investment is a must

Begin at the Beginning

• Establish a clear across-the-board understanding of the business need– Create functional and IT partnerships– Prepare the preliminary business case and presentation– Gain necessary executive sponsorship and support– Educate the troops – good communication is essential

• Create a project charter– What will be achieved and who will be responsible– How team will be organized and decisions will be made– Criteria and requirements for success– Risk factors and risk mitigation– Establish a game plan

Begin at the Beginning

• Identify affected business processes– At a minimum, name and define them and then

evaluate and prioritize them– Ideally, collaboratively document key processes – Understanding your existing business processes will

help in many ways• First time for many to see the process “from above”• Reveal immediate opportunities to improve• Shared/validated sense of process priority• Guide requirements and vendor demos• Key to Fit/Gap analysis and implementation

planning

Requirements, Solicitations, and Demos

• Identify business and technical requirements– Should tie to business processes– High level reqs are easier to write / hard to measure– Detailed reqs are harder to write, but easier to measure

• Prepare solicitation (RFP, RFI, etc)– Many good examples available – strive for quality

• Prepare for demonstrations– Scripts based on most important and realistic scenarios– Tie scripts to requirements for easy cross-referencing– Establish clear expectations, but allow vendors time to

highlight their strengths

Due Diligence

• Early due diligence to determine potential suitability– Market focus, technology platform

• Subsequent due diligence– Financial stability and future direction – Reference checks – their list and yours– Demonstrations based on your key scenarios– Beyond the sales team – management, product

development, implementation, training, support– Total cost of ownership (TCO) over reasonable life of

product– Contractual terms and conditions

Due Diligence – Don’t Forget Yourself

• Is your organization ready for this project?– Executive sponsorship and support– Financial commitment– Stakeholder commitment– Project organization and governance

• Do you have or can you obtain the necessary skill and experience sets?– SMEs, technical, project mgmt and administration

• Do you have sufficient resources?– Staffing backfill, project work space

The Vendor Perspective

• Technology sales is hard, expensive, and risky– Big opportunities can cost $500k to chase, win or lose– Lots of people, hoops, and pressure to pursue a sale– Successful sales people personally invest in their

prospects• Process vacuums will be filled

– If you aren’t providing information, vendors will seek it– If you don’t establish a protocol, vendors will

• Credibility is something you can lose, too– Don’t ask vendors to do something that you would not

be willing to do, e.g. fly a team out… next week• The partnership mindset begins with you

Common Vendor Selection Mistakes

• Not Enough/Too Much Time • Not Enough Research• RFP is a Surprise / Poor Quality / Scoring Unclear• No Plan for Demos• Insufficient Due Diligence• Insufficient Education and Buy-In• No Rules of Engagement• Fool Me Once…• Entering Negotiations Alone, Naked, and Cold

We’ve Seen Them All…

Pre-RFP Planning• Limited Stakeholder Involvement• Poor Requirements• Purchasing, Finance, and Legal

involved late• Vendors gain access and

information however possible

RFP• Borrowed• Re-purposed• Confusing to

vendors / addenda• Timing may

surprise or put-off some

Vendor Evaluation• Vendor Canned Demos• Limited Due Diligence• Unclear Decision and

Project Governance Models

• Weak Contract Negotiations

Pre-RFP Planning• Stakeholder Involvement Req’d• Excellent Requirements• Purchasing, Finance, and Legal

involved from the beginning• Vendors provided controlled

access with rules of engagement

RFP• Written to suit

purpose• Clear and

impressive to vendors

• No surprises

Vendor Evaluation• Good, scripted demos• Solid Due Diligence• Clear Decision and

Governance Models• Highly-Effective Contract

Negotiations with Win/Win

Much Better Selection Process

Poor Selection Process

Great Advice from Peers

• “It’s the Design, Not the Features”– Jim Ritchey and Phil Hill of Delta Initiative– Features are important but the application design

(monolithic vs component) must be right for you

• “Leverage the custom requirements – internally and with the vendors”– Charlie Moran, Moran Technology– Vendors can’t do everything, so use their scope and rough

pricing information from the RFP response to challenge or confirm unique stakeholder requirements and get down to what is really worth paying for

Great Advice from Peers

• “Remember, it’s a people problem” – Ed Cornelius, President, Collegiate Project Services– Without an enterprise-wide engagement process it’s often difficult

to get consensus going forward

• “While several vendors may provide solutions that meet your needs, all vendors are not alike.” – Vicki Tambellini, General Manager, The Tambellini Group– The differences between vendors can be great.  The software you

select is a small part of successfully meeting your requirements.  – Vendor differences include various approaches to training,

implementation support, help desk, upgrades and new releases, business policies and legal risks. 

– It’s worth the time to understand all of the details behind the differences in the vendors and their solutions and approaches in order to make the best “fit” decision for your institution.

The Reverse Auction

• Matt Gibbs, Ohio University• Five Year, $17 Million Network Upgrade• OU’s OIT Provided:

– Provided detailed equipment specifications– Established strict vendor participation criteria– Engaged stakeholders early and often

• Web-based reverse auction system– 141 bids in 84 minutes from several pre-

qualified vendors• Achieved initial purchase pricing 16%

($145k) below state contract– Anticipate ~$3M in savings over 5 years

What We Are Seeing More Of

• Heightened due diligence – internal and external• Open, transparent, intentionally well-managed

selections• Commitment to stakeholder education and

participation• Strong business cases• Cross-discipline teams• Business process documentation and management

– Faster, better, easier tools make this possible• Vendors engaged earlier and more effectively

Contact Info

Dan Miller, Advantiv Solutions

[email protected]

866.966.2911 x101

www.advantiv.com

Delivering cloud-based Plan-to-Procure since 1997.

Thank You

Dan Miller, Advantiv Solutions

[email protected]

866.966.2911 x101

www.advantiv.com

Delivering cloud-based Plan-to-Procure since 1997.