The initial blog in this series exploring why a business should consider running a formal selection process can be found here.
How do we run vendor selection processes?
The result of a vendor selection project is for the business to have a selected a vendor that meets their requirements and justifies the business case for change. Other outputs in a vendor selection process include a proposed implementation plan and approach, and contractual / commercial agreements.
Typically, a vendor selection is split into 4 phases; assess, prepare, evaluate, and commit.
- Determine the underlying business drivers for the Transformation programme through the development of Design Principles
- Develop a set of model options for evaluation and to determine the best mix of different technology and services between the front, middle and back office
- Assess the market providing an initial market scan of vendors to develop both long list and short list for receiving the RFP
- Develop the RFP based on Design Principles and high-level requirements
- Develop evaluation and scoring criteria framework for vendor responses
- Coordinate initial Vendor scoring based on RFP responses and overlay knowledge of the Vendors to assess RFP responses vs known capability
- Each Vendor’s commercial proposal are compared against each other, and the internal TCO
- Coordinate the Vendor demo process, use cases to demonstrate and final scoring assessment
- Support the definition of the Programme Business Case through provision of cost/benefit parameters and best practice approaches
- Provide assessment report to aid the final decision and selection of Vendor
Our typical Vendor down-selection model
Critical success factors to vendor selection
Best of Breed vs Single Platform vs Single Vendor
It is key to understand the market landscape and which Vendors have proven capability across all the business’s product requirements, capturing any need to develop around gaps. It is possible that Vendors may propose multiple solutions from their set of offerings to satisfy the full capability requirement included in the RFP.
Sponsorship and Buy In
Ensuring the right level of buy in from senior stakeholders and business functions on this phase. It is also important that key staff are able to donate their time to the project during the vendor selection phase.
A rigorous and transparent process to ensure swift and empowered decision making and transparency across the programme.
Ensuring adherence to key design principles driven by a deep understanding of your business and existing IT estate to ensure the selected Vendor is the right fit. Design principles and requirements are gathered at the early stages of the vendor selection through numerous business functions and consolidated workshops. This can be a time consuming process but very important.
Alignment to all Business Functions
Ensuring consideration is given to all of the in-scope Business functions and their particular set of product and technology requirements, whilst still adhering to the programme objectives and Design Principle.
Quality RFP documentation
The creation of a high quality and detailed RFP documentation is critical to ensure they can understand what the vendor can offer. It is also helpful to have detailed use cases relevant to the business to be able to test the solution the vendor is offering. From previous experiences Deloitte has a suite of accelerators which can be used to create the RFP, including a bank of RFP questions and information memorandum templates.
To summarise, vendor selection is an important process to understand the requirements of the business change and to understand the options in the market to meet these requirements. It is crucial that this is done correctly to allow the best vendor to be selected and achieve maximum programme success. If you have an interest in hearing more about how we may be able to support you with your own selection process, please reach out to Michael Hunwick.