After developing a meaningful RFP and scoring provisions, you move to the next step of deciding which vendor will fulfill your technology project requirements. Before beginning on this phase of your project, you need to gain a clearer understanding and approach to the selection process
Use the Early Processes to Educate Yourself
Use these early stages of your technology investment to gain useful business knowledge. Enter the RFP and Vendor Selection processes wanting to learn as much as you can– not just about the vendors, but about approaches, tactics, techniques, strategies, business ideas, and business process improvements. After all, any ERP project has a significant business component. If the vendor cannot deliver business-related approaches to technology, do you really need them?
If you approach your vendor selection as a genuine learning experience, you are far more likely to ask the tough questions that separate the vendors and neutralize the sales pitches.
I personally advocate a two-stage selection approach. In the first stage, you do an initial vendor overview and review of options and alternatives. In the section stage, you make a final selection from a shortlist. In the shortlist, you may want to include a wild card vendor, or the highest scoring vendor with a vastly different approach (such as the boutique shop or the staffing firm with a great resource pool). The wild card provides a different perspective and approach to your business and project, which can provide meaningful benefits. In some limited cases, the wild card vendor may even be the best fit.
Initially, you should look consider a fairly large field of vendors because they educate the business and selection committee while bringing multiple approaches to your attention. In the first round, I would limit the number of proposing vendors to anywhere from five to ten, depending on your company size, the amount of budget/technology investment at stake, and the impact to the business.
In the second round of vendor selection, I would select either two or three vendors for the short list. Depending on your business, you may also include the wild card vendor as an additional competitor for the business. If nothing else, the additional vendor model brings a new dimension to the competition for your business.
Pre-Proposal Vendor Strategy Meetings to Sharpen Vendor Selection Focus
Lots of companies are careful when choosing the selection team members, writing their RFP, and determining their needs and scope. Despite of all of this upfront preparation, few of these companies take the time to have a strategy meetings about the vendor selection. Sure, they might have meetings about requirements gathering or what key project characteristics are important for them, but few of them carry out strategy meetings to deal with the vendor sales approaches.
The ultimate goal is to treat this as a technology investment in the business, not a competition for who has the best presentation skills.
Your selection committee may all be professionals. They may have all worked together before and have a great rapport. However, at this stage of the process, that does not ensure success. Everyone on the selection team needs to be on the same page, all pulling together for the business as a whole.
One way to facilitate moving in the right direction is holding a few strategy meetings before your first vendor ever shows up on site. You already know what the goal is: you want the biggest business benefit from the technology investment. Has that specific message been communicated to the selection committee? You cannot assume the committee will have this focus, because in the heat of the sales presentation, they can easily get caught up in the “dog and pony show” the vendors put on.
During these strategy meetings, discuss the types of questions to ask the vendors, how to approach the vendors, and what to do in various types of circumstances. As the committee exchanges ideas about how to achieve the goals of business benefit, they will further develop approaches, ways of questioning, and other thoughts on how to best neutralize the vendor sales pitches. These meetings sharpen the focus of all of the team members on the important project goal– achieving breakthrough results.
For example, a classic sales tactic some unscrupulous vendors use is engaging in “techno-babble” to someone who might ask a tough question. This way, they appear to be the expert while intimidating that person from asking more tough questions. Think about how to neutralize this. What do you think that sales person’s or vendor’s reaction might be if a senior-level VP, or the CIO, or a senior IT Director spoke up and said, “I’m not sure I understand your answer. Can you simplify it in plain English so that we all understand it?”
Before the first vendor shows up, review and discuss each of the important scoring protocol categories. Discuss some examples of what you would consider as meeting the requirement, and what you would consider to be situations or circumstances that might need to be scored lower or even have points deducted in the proposal. Again, this approach sharpens everyone’s focus and normalizes expectations of what is important to the business.
System Integrator or IT Vendor Selection Methods to Neutralize Smoke and Mirrors
- Videotape the entire presentation. Ensure that you state in the RFP that you will be videotaping and any sales claims will be binding.
- Drill into customer qualifications or references (not just the what they did, but how it applies to your situation).
- If a functionality question is asked that was not presented in the original RFP and the vendor answers it, propose that same question to all of the RFP participants, and ask them how they would solve it (what specific functionality, how many resources, what time frame, any additional hardware or software requirements). Then, compare these results to gauge if any of the vendors are just giving you a sales pitch.
- Ensure that the vendors provide a process demo of a predefined but untold process ahead of time. This will quickly separate the companies that can deliver from those who cannot. Give them four to eight hours to come back and deliver. Score down for delays or incompleteness.
- If the vendor claims to have a special development item or methodology, intensely explore how their “special” is different from or better than a standard option, and how support costs for any custom solution fit in the framework of any package application support agreement. If this special item is compelling to the vendor selection, capture the key issues this special item addresses, and then send it to all of the vendors in a follow-up questionnaire about how each of those vendors would handle that particular issue. In other words, do not give away the vendor’s “special,” but be sure to address the need or want that specialty item addresses. I have personally been on many SAP projects where some custom-developed trash ended up in the project because of the vendor’s sales pitch, even though the standard functionality was already there, integrated, and operational (and in some cases more operational than the vendor’s “specialty” item). Integrators who provide consultants who are less experienced are notorious for custom coding everything rather than finding ways to use standard functionality.
- Include a contract provision with contingencies that employ the vendor for the blueprint phase, and only allow the vendor to do the follow-up project work if you are satisfied with the final blueprint document and a first-round prototype at the end of the blueprint phase. This pressures vendor to bring their best consultants for the blueprint and do a good job from the beginning.
- Include a provision in the RFP and vendor contract for credits related to resources that are not up to the quality and performance level expected for such a project. This will require language from your legal department.
Do not score any vendor or vendor presentation until after the last vendor proposal. Only take notes and make observations. This reduces some of the inherent bias for “first-up” presenters. Early vendor scores tend to be higher even for lower quality vendors, because you have not yet established a “benchmark” to gauge the early vendor’s performance. By the time you reach the last vendor, they are generally scored the harshest because those scoring the presentations gauge their performance against the backdrop of all of the other presentations. As a result, I personally advocate avoiding scores until all presentations and follow-up selection committee discussions are complete.
After the final vendor presentation, you may want to regroup and compare notes, thoughts, and ideas before scoring the vendors. If you take this approach, you should not openly discuss anyone’s score, but rather focus on the vendor presentation content and how well it lined up with both the RFP and underlying business needs.
As a sidenote here, you should not discuss scores at this meeting because many people are practical. In an age where many people feel insecure about their futures, an open discussion of scoring at this meeting might unduly influence a more realistic appraisal of the vendor. For example, Susie VP may openly announce she is going to score section “X” with a 10 out of 10 because it met her needs particularly well, but Mark Director who has a dotted line relationship to her may see that the vendor only partially met his department’s needs for that section. Therefore, Mark Director might normally give a 6 out of 10, but upon hearing Susie’s 10, he may be more reluctant to score that vendor down for that section even though his score would provide a more accurate appraisal of business fit for the vendor.
After all of the proposals are complete, these discussions are also important because they refresh everyone’s memory about the proposals and again sharpen the focus on what matters to the business. If you decide to have this meeting, it may then be helpful to immediately do the scoring right after this wrap up and recap discussion of the vendor proposals.
Always remember, the ultimate goal is to treat this as a technology investment in the business, not a competition for who has the best presentation skills.
One suggestion on the scoring is that if you have five or more people involved in the selection committee, you may want to “normalize” the scoring of the RFP sections by throwing out the highest and the lowest score for each section.
For the low score, you may want to circle back to that individual and understand what influenced their low assessment or score. If the individual raises some serious or significant gap, you may wish to address it with the implementation vendor and alert the group as a whole if they make it to the shortlist. If that vendor ends up being selected, you should address any low-scoring areas with the vendor prior to awarding a contract. This type of expectation setting can significantly change the quality of the project right from the beginning. It sets the tone that you prioritize business results from the software investment.
Four Part Series:
Achieve Breakthrough ERP, SAP, or IT Project Success: 1 of 4
Breakthrough Project Success: 2 of 4, IT Vendor Proposal RFP
Breakthrough Project Success: 3 of 4, Vendor Selection and Contracts
Breakthrough Project Success: Part 4 of 4, Last Low Risk Chance for Results
