Taking the Next Step

An exciting new initiative is the talk of the organization and senior leadership is on board. Time to talk to vendors, right?

This is the all-too-common approach to selecting technology partners and, as all veteran advisors know, a key contributor to why projects fail. Selecting the right vendor is part art, part science.

Just as we discussed in part one of this series, sound preparation before the selection process begins is key in order to:

• Answer why new technology is desired
• Foster alignment on objectives and realities
• Assemble expertise and a representative selection team
• Equip the team with a solid selection framework and toolkit

Before engaging vendors.

Then we’re able to start the evaluation and selection process.

1. Identify & Engage Your Potential Vendors

Create a List of Candidates

Who are the likely candidates that fit the requirements and criteria? The Domain and Selection Experts will help here and introduce the full Selection Team to the marketplace providing high-level profiles on potential vendors. For example, should only top tier applications be included? Or are mid-tier solutions a better fit? Are some non-functional requirements determining factors? The emerging list should include a reasonable number of candidate vendors, enough to compare, but ideally not so many that it becomes a monumental task.

Invite Vendors to Submit Proposals

Vendor communications are best handled from a single point of contact, in a structured, and neutral way. When the Selection Expert launches the process with a well-communicated initial invitation, declaring a private RFP, with clear instructions to follow, it sets the tone. The moment the word is out, we often see a flurry of sales calls. Funneling inquiries through a single point of contact helps mitigate that and signals that you are well-prepared to evaluate the candidates in an orderly fashion. It’s best that vendors be required to formally convey their intent to participate followed by an introductory call.

2. Publish the RFP Kit

We believe there is great value in distributing the formal RFP kit to all vendors in the same way at the same time. This signals the rules of engagement and sets a level playing field. Participants may seek back channels or have an inherent advantage from existing knowledge of a company. Beware of deal offerings to bypass or rush the selection process. Stick to your guns and your plan!

There is also the potential for a vendor to opt out at any stage of the process or the Selection Team may decide that a vendor is less qualified. That’s to be expected, and we would recommend an informal force ranking, while continuing with all reasonable candidates to ensure you’re selecting from a good pool with ample data.

Offer Requirements & Review Sessions

This is a key exchange with the vendor where you are clearly describing what you are looking for in a solution and in a partner. Insist on a response and demo tailored to those requirements. A vendor who won’t thoroughly engage in that dialog signals what to expect from them as partners. Express your concerns and reduce the pool.

3. Conduct Demos

This is where the rubber meets the road. Have the vendors heard you? Understood your needs? Prepared a tailored and comprehensive demo that showcases how they’ll partner with you? After all your preparations, you deserve nothing less. A generic sales demo or unprepared team simply won’t do. A well-qualified vendor will show you, thoughtfully and in detail, how their solution meets your needs. They will propose best practices and perhaps offer recommendations you have not thought of yet.

We recommend recording and revisiting demos, especially if a session offered new insight that you want to compare to an earlier demo.

The Selection Team is forming opinions along the way, and the Selection Expert is collecting preliminary scores at each step. Which vendor was the most engaging? Which demo showed a robust solution? Your Selection Expert may also highlight distinguishing factors. We encourage the Selection Team to debrief after each session to gather immediate impressions and process and reflect individually and as a team to arrive at scores. Did we say it was art and science? It is.

4. Review the Proposals

Following the demo round, each vendor submits a written proposal that is intended to bring it all together. It should describe in detail:

• The solution and potential architecture
• The implementation effort and team
• Unique values the client can benefit from
• Post-implementation support
• The proposed partnership

Beyond the solution, quality of the proposal matters. Is this a generic proposal with logos and numbers replaced? Or a precise solution and recommendations reflecting the client’s needs? We believe it’s important to pay attention to what may have been omitted or glossed over. Was this an oversight? Does it point to a requirement the candidate cannot meet?

Most importantly, the proposal includes financials, the vendor’s cost to implement and support the solution. We recommend including an IT Finance Expert to not only evaluate the numbers provided but assemble a comprehensive financial model for major technology investments. What is the return on investment (ROI) and how should that be measured? Is there an impact on technology budgets and cashflow? What does the financial picture look like over five years? Is there a payback period?

5. Determine the Finalists

A thoughtfully executed selection process involves many steps. While it may seem linear, we encourage allowing for some iterative steps along the way. Dialog with vendors between the steps is important to guide them towards clearer and more complete proposals. Style differences will emerge as well, identifying vendors as more strategic, technical, or pragmatic, comparatively speaking. All interactions contribute to the “profiles” that are taking shape, allowing the Selection Team to compare and evaluate what it would be like to partner with each candidate.

Leading contenders are clearly emerging at this stage. Scores and financials may be very close, or worlds apart. Do you select the lower cost offer? Maybe. Why are the offers so far apart? Let’s ask.

Finalists are usually invited to one last round of conversation to tune their proposals, share standard materials, and submit their “best and final” offering.

What else matters that tips the scale? We can’t stress enough the importance of completing the process thoughtfully. Gathering that complete picture helps the Selection Team drive a decision on many critical dimensions and feel aligned and confident about it.

And the winner is…

6. Award Contract

Time to review contracts, usually comprised of a master services agreement and statement of work. Your Legal and Procurement experts who were on standby are ready to sharpen the pencils and hammer out a solid agreement. Proposals are only as accurate as the input factors, and vendors allow for some degree of uncertainty. Once a team is onsite and detailed planning begins, those factors should be reduced. It’s important to understand how “change” to the agreement would be managed. Procurement and Finance are motivated to negotiate aggressively. Beware that it should not sour vendor and stakeholder relationships. And the old adage is true: you get what you pay for. 

7. Start the Implementation

Both parties are likely eager to kick off the implementation as soon as possible. We talked in Part 1 about confirming organizational readiness. Ideally, that readiness remained in the forefront of the team and can be reconfirmed with preliminary plans that emerged during the selection process. If that is not the case, we caution our clients to resist and not plunge ahead before realigning and recommitting the necessary resources. The actual next step should be a detailed planning session that takes the vendor’s preliminary plan and adds in any other workstreams and resources necessary for the complete program. Furthermore, it accounts for dependencies that surely exist in the organization.

Why is this critical? You guessed it, rushing directly to the kickoff without through planning is another key factor in high project failure rates.

Conclusion

By this point, you’ve done all the right things to select a sound partner.  Make the investment count and apply the same diligence to program planning that will get you started with a much greater chance at success. It is no coincidence that planning visuals include ladders, steps, and metaphors like, “measure twice, cut once” or “look before you leap” abound.

How can LABUR’s Advisory Services help your organization’s technology journey? Reach out to advisory@labur.com for more information.