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Select and Evaluate Vendors

Select and Evaluate Vendors

Enterprises are dependent on vendors to obtain IT hardware, software and services. The Vendor Management process includes the identification, selection, contracting with, and ongoing management of vendors or suppliers, and is an essential part of the IT management process.

Vendor Management has four steps:

Plan the Purchase.
Identify Vendor Candidates.
Obtain Proposals.
Select the Preferred Vendor.

When you have completed these steps, you will have a solid understanding of what actions you should take when selecting vendors. Unless otherwise described, most organizations should use the OptimizeIT tools in this section.

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Steps		Tools	Related Research
Step 1: Plan the Purchase The vendor selection process should be efficient (taking the least necessary effort) as well as effective (resulting in the selection of competent and cost-effective vendors). Before beginning the shopping process, the enterprise should be able to describe the product or service it wants to acquire, agree on the criteria that are most important in making the vendor or product selection, agree on an acquisition approach, and identify who will be responsible for making the vendor or product recommendation. Info-Tech Tip: When the significance of a purchase is high, the organization should invest more effort in defining requirements and identifying benefits. Info-Tech Tip: A purchase can be significant not only because of high cost, but also because of its potential impact on the business or on IT.
	1.1 Prepare Solution Description The core tool in this stage is OptimizeIT’s Purchase Requirements and Specification Checklist. Use it to describe the planned purchase, its key features, and intended benefits.	Purchase Requirements and Specification Checklist	A Guide to Acquisitions Process Management
	1.2 Identify the Internal Approval Process and Criteria If the organization does not have a formal purchasing policy, use the OptimizeIT Purchasing Policy Template to document the rules or guidelines for IT purchases when these purchases are sometimes complex and unfamiliar.	Purchasing Policy Template
	1.3 Prepare Selection and Evaluation Strategy If the organization does not have a formal purchasing policy, use the OptimizeIT Purchasing Policy Template to document the rules or guidelines for IT purchases when these purchases are sometimes complex and unfamiliar.	Purchase Strategy Tool	Delegate Vendor Selection, but Participate Establishing a Selection Committee for Enterprise App Projects Niche Vendors Meet Needs Not Met by Mainstream Vendors When and How to Get Competitive Proposals
	1.4 Prepare Vendor Selection Criteria The Vendor Selection Criteria Guide, again for more experienced buyers, suggests factors that should be included in evaluating vendors for various types of purchases.	Vendor Selection Criteria Guide
Step 2: Identify Vendor Candidates The selection team must develop a shortlist of suitable vendors that it will assess in detail. The preparation of this list typically involves assembling a list of candidates and carrying out a preliminary assessment of suitability. Info-Tech Tip: The organization should reduce the number of potential vendors to between three and five before requesting formal proposals or quotations. A detailed evaluation of more candidates is non-productive for the buyer and of low value for prospective vendors.
	2.1 List and Evaluate Potential Candidates OptimizeIT’s Vendor List Validation Tool helps identify where to find potential vendors to ensure a comprehensive candidate list. More advanced buyers should use the tool. The Vendor List and Evaluate Tool helps organize the information about prospective vendors and enable creation of a shortlist for deeper evaluation. It is appropriate in all situations involving a choice from a list of alternatives.	Vendor List Validation Tool Vendor List and Evaluate Tool
Step 3: Obtain Proposals Once the team has identified prospective vendors, it must obtain concrete proposals from them. Info-Tech Tip: The objective of any vendor evaluation is to pick the best solution to a requirement, not to assess a supplier’s general competence. It is essential, therefore, that buyers clearly identify and communicate to prospective vendors what is most important to them.
	3.1 Develop Purchase Documentation for Vendor OptimizeIT’s Vendor List Validation Tool helps identify where to find potential vendors to ensure a comprehensive candidate list. More advanced buyers should use the tool. The Vendor List and Evaluate Tool helps organize the information about prospective vendors and enable creation of a shortlist for deeper evaluation. It is appropriate in all situations involving a choice from a list of alternatives.	Request for Information Template Request for Quotation Template Request for Proposal Template	Establish Real Need Before Issuing an RFP When and How to Get Competitive Proposals
	3.2 Assemble Received Proposals The evaluation team must ensure that vendors deliver proposals on time and that information about all responses is readily available. OptimizeIT’s Proposal Receipt Template helps track all of the responses received. The tool is appropriate for all situations where vendors have been asked to submit a proposal rather than a price quotation.	Proposal Receipt Template
Step 4: Select the Preferred Vendor The team must select the preferred vendor using the selection criteria established early in the process. In addition to reviewing the formal proposals, the team should verify the claims made by the vendors. Info-Tech Tip: The evaluation process should lead to the identification of at least one vendor, product or service that addresses the organization’s need. When there are several relatively similar, good solutions, make a decision quickly, whether based on price or strength of a past vendor relationship. Do not search for an elusive tie breaker.
	4.1 Evaluate Proposals The Proposal Evaluation Tool provides a framework for grading proposals against appropriate selection criteria, and reaching a rational decision as to the "best" proposals. The tool is appropriate when issuing a formal Request for Proposal to vendors.	Proposal Evaluation Tool
	4.2 Examine Vendor Claims OptimizeIT’s Supplementary Examination Plan Template helps evaluation teams organize a thorough validation of vendor claims, when the formal proposals are insufficient to reach a firm decision.	Supplementary Examination Plan Template	Guidelines to Assess the Viability of Private Vendors Conduct Vendor Due Diligence Before Signing the Contract Perform Due Diligence on App Vendors to Avoid Unpleasant Surprises Master the Enterprise Application Vendor Demo

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Steps		Tools	Related Research
Step 1: FastTrack Select and Evaluate Vendors This FastTrack Tool is a simpler, less rigorous approach to completing the program. Nonetheless, FastTrack addresses the fundamental elements of the program and is expected to support your efforts to improve the IT function. FastTrack is intended for organizations who have reasonable, simple and straightforward IT environments. Because it is simpler, FastTrack is an accelerated program, designed to be completed in a short period of time.
	1.1 FastTrack Activity	Select and Evaluate Vendors FastTrack