After the early efforts to develop a meaningful RFP and scoring provisions you move to the next step of deciding on which vendor you will engage to fulfill your technology project requirements. Before beginning on this phase of your project it is really important to gain a clearer understanding and approach to the selection process before it begins.
Use the Early Processes to Help Educate Yourself
Use these early stages of your technology investment to gain useful business knowledge, not just about technology, but about business as well. Enter the RFP and Vendor Selection processes with the idea that you want 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, with any ERP project like SAP or any other large project there is a significant business component and if the vendor is unable to 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 help to separate the different vendors and help to neutralize the sales pitches.
You want the biggest business benefit from your technology investment
I personally advocate a two-stage selection approach. This two-stage approach does an initial vendor overview and review of options and alternatives and the second is to make a final selection from a shortlist. In the shortlist you may want to include what I would call a “wild card” vendor. That would be the highest scoring vendor with a different approach (such as the boutique shop or the staffing firm with a great resource pool) because they still bring a different perspective and approach to your business and project which could provide meaningful benefits. And in some limited cases the “wild card” vendor may be the best fit for true breakthrough results.
In the initial stage a fairly large field of vendors is helpful because they help educate the business and selection committee while bringing multiple approaches to your attention. In the first round I would limit the number of vendors allowed to propose to anywhere from 5 – 10 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 2 or 3 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 that can only help you get the best resources and the best deal.
Pre-Proposal Vendor Strategy Meetings to Sharpen Vendor Selection Focus
Lots of companies are careful in choosing the selection team members, in writing their RFP, and in trying to determine their needs and scope. In spite of all of this up front preparation few of these companies take a small amount of time to have a few 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 some “beauty pageant” about who might have the best presentation skills.
Your selection committee may all be professionals–, skilled, talented, and qualified; they may have all worked together before and have a great rapport but at this stage of the process that does not ensure success. It is important to have everyone on the selection team on the same page, all pulling together for the business as a whole.
One way to help facilitate moving in the right direction here is to have 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 can not take this for granted because in the “heat” of the sales presentation it is not difficult to 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 they are to be approached, and what to do in various types of circumstances. Ideas exchanged about how to achieve the goals of business benefit in these few strategy meetings will help all participants develop ideas, approaches, ways of questioning, and other thoughts on how to best neutralize the vendor sales pitches. These meetings will help to sharpen the focus of all of the team members on the important project goal–, achieving breakthrough results.
For example, one of the classic sales tactics by some unscrupulous vendors is to engage in “techno-babble” to someone who might ask a tough question to try to look like the expert while intimidating that person from asking more tough questions. Think about how to neutralize this, what do you think that sales person 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 to have points deducted in the proposal. Again, this approach helps to sharpen everyone’s focus and to “normalize” expectations of what is important to the business. It helps to reduce some of the sales smoke and mirrors.
System Integrator or IT Vendor Selection Methods to Neutralize Smoke and Mirrors
- Videotape the entire presentation and ensure that it is 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 was magic? HOW does that apply to your situation?)
- Functionality discussion – 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” that can’t be delivered.
- Ensure that the vendors provide a “challenge” process demo of some pre-defined but untold process ahead of time. This will quickly separate the companies that can deliver from those who can not. Give them 4 – 8 hours to come back and deliver, score down for delays or incompleteness.
- If the vendor claims to have some special development item or some special methodology then be sure to intensely explore how their “special” is different 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 or important to the vendor selection then be sure to 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 a sales pitch when the standard functionality was already there, already integrated, worked well, and in some cases even worked better than the vendor’s “specialty” item. Integrators who provide consultants who are less experienced are notorious for custom coding anything rather than finding ways to use standard functionality.
- Include a contract provision with contingencies that employ the vendor for the blueprint phase with the follow up project work based on satisfaction with the final blueprint document and a first round prototype at the end of the blueprint phase. This puts pressure on the vendor to bring the best folks to the table for the blueprint and to do a good job right in the beginning when it is most critical.
- 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, but you get the idea.
Do NOT score any vendor or any vendor presentation until after the last vendor proposal. Only take notes and make observations. This will help to reduce some of the inherent bias that tends to exist for “first up” presenters. Early vendor scores tend to be higher even for lower quality vendors because there is no “benchmark” established to gauge the early vendor’s performance. By the time the last vendor is reached they are generally scored the harshest because those scoring the presentations have the benefit of gauging their performance against the backdrop of all of the other presentations. As a result I personally advocate avoiding scores until after all presentations are complete and after followup selection committee discussions.
After the final vendor presentation it may be helpful to re-group and then compare notes, thoughts and ideas before doing any vendor scoring. If you take this approach it is important not to openly discuss anyone’s score but rather to focus on the vendor presentation content and how well it lined up with both the RFP and the underlying business needs.
As a sidenote here, the reason it is important not to discuss scores at this meeting is because many people are practical. In an age when 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 hearing Susie’s 10 he may be more reluctant to score that vendor down for that section even though that would provide a more accurate appraisal of business fit for the vendor.
These discussions after all of the proposals are complete are also important because it will help to refresh everyone’s memory about the proposals and to 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 some “beauty pageant” about who might have the best presentation skills.
One suggestion on the scoring is that if you have five (5) or more people involved in the selection committee then it may be worthwhile to “normalize” the scoring of the RFP sections by throwing out the highest and the lowest score for each section.
For the low score it may be important as a business to “circle back” to that individual and understand what influenced their low assessment or score. If there is some serious or significant gap the low scoring individual raises 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 they are the selected vendor it would be important to address any low scoring areas with the vendor prior to awarding a contract. This type of expectation setting can make a significant difference in the quality of the project right from the beginning. It sets the tone right from the beginning that business results from the software investment is what is important.
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
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- scoring vendor presentations