www.BPGroup.org Choosing the Right Supplier A Guide for Evaluating difficult choices
Business Process Management - Choosing The Right Supplier
Nov 22, 2014
An updated set and for some 'teaching granny to suck eggs' however often Supplier selection is where the screw-up starts :-D
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www.BPGroup.org
Choosing the Right Supplier
A Guide for Evaluating difficult choices
www.BPGroup.org
Introduction
Since our founding in 1992 the BP Group and its Associates have been involved in dozens of evaluations of new systems and business approaches. We have helped major government departments, financial services companies, local government, Telco’s, utilities and ‘not for profits’.
This presentation outlines our best practice and the top level process to help you choose the right supplier. Naturally our assessment goes much deeper than this and we subsequently are often involved in post selection support, project guidance and implementation.
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Evaluation Viewpoint
High level Designed to achieve optimum results Flexibility to satisfy the needs of ….. Budget and time constraints
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OVERVIEW
WHO is appropriate to help in the search WHAT steps are taken during the search WHERE do you look WHEN do you do certain activities HOW you make the decision. . . . .
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Assemble the Evaluation Team
Representation from: Information systems
personnel End users Consultants Business process
specialists
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The Evaluation Team
Criteria: Empowered Establish reporting
relationship Full time Team room Flexible Shared goals Shared loyalties
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Feasibility
Does your company need more than is currently available?
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What is Driving the Need to Change?
FunctionsRequirements to get the job done
FeaturesConvenience attributes that enhance functions of
usage
New processing requirementsResults of mergers, acquisitions for changes in
scope of operation
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Preparing for the Evaluation
Document your current system• Interview users from each area• Identify needs and wants• Prioritize your new system
features/functions
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Document Your Current System
Identify and document:
What does it do well?
What needs improvement?
What does it not do?
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Interview Users From Each Area
Document users’: Functions performed with current system Perceived weaknesses of current system Perceived strengths of current system Potential efficiency
enhancements
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Identify Needs and Wants
Current System Features and Functions
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Prioritize New System Features/Functions
Needs Wants Environmental issues
such as:o Database supporto Platform preferences
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Decision
Yes
No? then Reengineer
Do you really need a new system?Do you really need a new system?
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Decision
Build
BuyYes we do. Now do we?Yes we do. Now do we?
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Develop a List of Possible Vendors Sources include: Professional organizations contacts such as
BPGroup, ABPMP, IPM and IOD Analysts such as Gartner and Forrester Other companies in the area Other companies in the same industry Trade shows Evaluation consultant
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Develop a Request for Information (RFI)
Include minimum qualification requirementssuch as: Hardware/software environment requirements Specific application requirements Major functional requirements Major feature requirements
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Request from each vendor: Concurrence with minimum requirements Current pricing with 180 day hold Three references installed in the last three
years Nearest local user group contract
Develop a Request for Information (RFI)
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Request vendor background: Profile Financials Client base Other applications offered Third party software included/required
Develop a Request for Information (RFI)
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Getting the Answers
Request response within three weeks of receipt of RFI.
Immediate Answers
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Evaluate the Results of the RFI
Disqualify: All non-respondents
Vendors not meeting minimum requirements
Unreasonable pricing
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Evaluate the Results of the RFI
Contact the references of the remaining vendors to: Interview their evaluation team. Validate the length of use of their system. Review their implementation:
o Timeo Scopeo Staffing requirementso Consultants, if used
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Evaluate the Results of the RFI
Determine if the source code has been altered. If yes, why and to what extent?
Ask for other references. If consultants were used, contact them.
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The Request for Proposal (RFP)
Expansion of the RFI Written RFP
Detailed requirements Instructions for bids Evaluation tool
Verbal RFP
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Meet With Each Vendor to Review Needs
Objectives for the meeting should include:
Review the process thus far. Define the priorities of needs. Discuss the vendor’s “solution”. Seek clarification of RFI responses. Review the next event and the remaining
evaluation process.
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Vendor Presentations/Demo
Scheduling considerations: Demos should be at your site. Schedule no more than two demos per week. Avoid scheduling for a Friday or before a holiday. Schedule an internal debriefing the day after each
demo. Start in the morning.
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Vendor Presentations/Demo
Prior to demo, discuss with vendor: Expectations and preliminary agenda Minimum demo criteria/checklist Emphasis on “LIVE” demo over presentation
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The Demo – beware of the glitz!
Do Expect the vendor to demo based on your needs.
Focus on functional requirements. All evaluation team members should stay for the
entire meeting. Do not fragment meeting by evaluation groups.
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Evaluations
Will objectives be met? Are requirements filled? Is there a
cost/value balance? Does it fit in long term
strategic plans?
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Choose Finalists
Select a front runner, an option two and Select a front runner, an option two and never more than never more than three finalists.three finalists.
Criteria: Best fit with needs Strength of references Responsiveness of vendor representatives Implementation time and cost
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User Site Visits...
Select the site based on functional match rather than location or industry.
If the vendor attends, request time alone with the users. Review vendor reference questions. Ask about other product users, get names and phone
numbers for further follow-up. View system.
An opportunity to see the product An opportunity to see the product in the real worldin the real world
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Vendor Corporate Visit...Optional
Opportunity to meet senior management, review corporate direction and upcoming technology.
Stay focused on requirements and current product availability.
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Now Select One Finalist...and One Alternate
Explain where each vendor stands and that you will buy from the finalist unless terms cannot be reached.
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Evaluate Your Implementation Options
Internal staff Consulting alternatives...don’t choose without
looking at more than one option.o Vendor o Others
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Contract Negotiations Begin
Decide if vendor’s standard license or yours will be the basis for negotiations.
Set forth your expectations and timeframes. Include pricing only for all software and maintenance. Buy ONLY what you evaluated. Beware of extras.
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Sign the AgreementSign the Agreement
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Summary
Stay focused on functionalityBeware of distractions Glitz and bling Insignificant functions and features
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Summary
Software license Internal staff Consulting cost 5 Year projected cost Maintenance cost
o Vendoro Internal staffing
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Implementation...The Real Work Implementation...The Real Work BeginsBegins
Thank you
More information?
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