Most organizations reach a point in their history where they realize: we need more. More data, more organization, more collaboration. By 2025, enterprises will create and manage 60% of the world’s data, yet only 3% of business professionals say they can act on any collected customer data.
How can we close that gap and move further down the path to more? In recent years, organizations have accomplished this by adding to a collective technology stack, but many do not have the capability to create software in-house, so the path to “more” is through vendors. But this complicates the process! How do we choose a good vendor? How do we work with vendors? How can we tell a good product from one that is not needed?
Read on to uncover five key questions Credera uses to partner with and support our clients in their technology vendor selection process.
1. What software or technology does your organization need?
It is common for our clients to jump straight to an assumption like, “I need a customer relationship management (CRM) system,” instead of looking internally to define and refine what is really needed. Rather than assuming, you should thoroughly assess the needs of your users and the context of your organization, then translate this information into a refined set of requirements and criteria that guides your software selection process. These requirements can range from the wide view of total cost of ownership (TCO) down to the granular, technical aspects of speed and connection types.
Many organizations need specialized capabilities, but few have the resources to build those capabilities in-house. Part of the initiation of vendor selection is assessing the “build vs. buy” decision; prioritizing this decision saves money and time when it comes to TCO and time to implementation. A rushed or improperly evaluated decision can cost your organization far more than it needs to, and an experienced vendor selection consultant can support this assessment to ensure your organization is on a strategic path forward.
2. Which vendors get evaluated?
Now that you know what you need, you can narrow the pool of vendor candidates and search for the right partner to fit those needs. For larger efforts with potential non-standard requirements, it may be necessary to find out what capabilities each prospective vendor has. Sending out a request for information (RFI) is an easy, non-committal way to gather this information en masse.
Do not forget, by buying a product, you are also partnering with another organization. Long-term success relies on organizational alignment between your company and the vendor. Professors Karl Manrodt and Jerry Ledlow recommend looking at alignment in the five dimensions of buyer-supplier compatibility: trust, innovation, communication, team orientation, and focus. When a prospective vendor aligns in these five areas with your organization, the ensuing partnership is far more likely to be successful.
3. How do you evaluate vendors?
With a refined list of prospective vendors, it is time to gather detailed information to perform a thorough evaluation. To begin this process, use a request for proposal (RFP); this document outlines the established criteria and dictates what your organization is looking for. Share this with all prospective vendors and use it to evaluate their subsequent proposals.
Along with a vendor’s proposal, capitalize on the opportunity to see the vendor’s offerings in action with a demonstration. Demos should be held live, whether in-person or in a hybrid format, and will shed light on what cannot easily be expressed in an RFP (ease of use, processing times, etc.). With all demos, communication with the prospective vendor should be uncomplicated and effective—ask questions, get clarification, and hold as many sessions as needed to gather information for a final decision.
4. How do you make a vendor selection?
When you know what you need and have a narrowed list of prospective vendors and their products, now comes the opportunity to leverage the well-defined requirements. Score vendors against your established criteria based on their responses gathered through RFP and demos.
We recommend using score cards, which help ensure the final decision is based on quantifiable data. In a survey of senior executives, highly data-driven organizations are three times more likely to report significant improvements in decision-making compared to those who rely on less data. After your narrowed pool of vendors is scored, select a high-scoring vendor based on how well they align with your technical and partnership needs.
5. How do you get started with your selected vendor?
Selecting a vendor is an important first step, but implementing the chosen software or technology brings the proposed value and benefits to life in an organization. Crafting a robust implementation roadmap will lay out the required process to achieve a fully integrated system. This includes a transformation plan, stakeholder engagement, and viability of existing resources to support such an effort.
Next Steps with Vendor Selection
It is important to keep in mind that fully implemented and fully utilized are very different. Many organizations fall into the assumption that once a new tool is available, everyone will use it; these companies often do not see the full return on their new investment. Understanding how your organization will best transform and how to successfully foster the changes is critical in realizing full value. Credera’s Change Management and Program Leadership offerings can help navigate the transformation efforts associated with technology or software implementations.
Whether your organization is searching for vendor or software expertise or needs support for all aspects of the selection process, Credera would love to support your journey. At Credera, we know how to provide the structure, perspective, and guidance to support project delivery and instill trust throughout your organization. Contact us at email@example.com to learn how we can work together to accomplish your goals.
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