Chapter 06

The Vendor Selection Process


You’ve identified your business objectives and project requirements, planned your project budget and established a case for it, outlined your product specifications, written your RFP, and evaluated the proposals you received.

Now, it’s time for the last piece in the procurement puzzle: selecting your vendor.

Up to this point, every step you’ve taken, from defining project requirements and setting out the in-scope specs to evaluating potential vendors, has involved meetings and documentation.

But in the vendor selection process, you’ll put all of these preparations into action. This is your opportunity to make sure that the solutions you’ve evaluated will actually work for your organization.

Think of it like interviewing a candidate after reading their CV: you know you’re interested, and they seem promising, but you want to bring them in and make sure they will be able to work within your organization and provide the technology solution you’re looking for.

This chapter covers the ins and outs of this process:

  • Shortlisting potential vendors
  • Bringing in vendors for demos with you and your stakeholders
  • Narrowing down the number of candidates
  • Selecting your vendor.

person presenting

Shortlisting Vendors

Let’s pick up where we left off in the previous chapter. After evaluating and ranking the proposals you’ve received from a number of vendors, you should make a short list of the best proposals. These are the vendors you want to meet in person for discussions and demos.

Sometimes this involves simply ranking the top candidates and calling them up. But in many cases, there will be internal debate and disagreement among key stakeholders about which vendors should actually be at the top of your list.

Keep in mind that many different people in your organization will have to work with the technology solution that is selected: make sure your short list includes only highly ranked vendors who are a good fit with the unique concerns and needs of your project team and your stakeholders.

Product demos

Bringing in your shortlisted vendors and having them demo their proposed new technology solutions is the most important step in the vendor selection process. Demos give you an opportunity to see whether a proposed solution will work and make sure it can be integrated into your broader technology ecosystem. They also allow key stakeholders to test a proposed solution and get on board with its new technology.

Because demos can serve so many purposes, it’s important to arrange a number of them during your selection process. Here are several useful kinds of demos, in the order you may want to schedule them:

An initial call and brief demo

Rather than starting off by diving into the deep end with a major demo for all your stakeholders, it’s a good idea to begin by setting up an initial conference call, followed by a brief demo for the procurement team and project manager. This will enable you to confirm that the proposed solution is more or less what you’re looking for, that it works, and that you want to bring in the vendor for the next stage of the selection process.

An in-depth demo with key stakeholders

The next demo you arrange should involve your project’s major stakeholders. Anyone in your organization who will interact with or be affected by the new technology solution being proposed should be included in this demo. In part, this is a chance to confirm that the solution will meet your project’s business requirements and your stakeholders’ expectations. But it’s also a chance to get buy-in from your project team and make sure there are no glaring concerns about the new technology. If your project involves many stakeholders, you may need to arrange a few different demos that target different teams and end-users.

A dedicated technical demo with your technical team

Here is another important step in the selection process: arranging a dedicated demo that is just for your technical team. This demo is important from a feasibility perspective. Your technical team will be able to evaluate whether the new technology can be integrated into your organization’s existing technical infrastructure, and can give the all-clear on whether the implementation can be completed smoothly.

Technical teams often participate in every demo, and may dominate sales discussions, sometimes when the technology expert on the vendor side isn’t in the room. That’s why it’s a good idea to arrange a dedicated technical demonstration and let everyone know ahead of time that it’s on the agenda. This allows other demos that focus on use cases to stay homed in on their subject, and it also enables the vendor to come in prepared.

A final note on demos

One additional observation about vendor demos: they’re great, but you won’t get more out of them than you put in. Here are a few tips to get the most out of your demos:

  • Make sure your stakeholders do their homework. Ensure everyone knows which new technology the demo involves, what business problem it is intended to solve, and why it’s been shortlisted, as well as what you’re expecting each stakeholder to assess.
  • Keep the demo invite list short. It’s nice to have all of a project’s stakeholders attending, but often a new technology demo looks like there are too many cooks in the kitchen. Keep the invite list as short as possible.
  • Try to play with the new technology before the demo. If possible, get a preview version and arrange a test drive with some dummy data a week or two ahead of the demo. It will lead to better questions from your project’s stakeholders.
  • Try to replicate your system as closely as possible. Give the vendor some of your organization’s data, or explain a workflow problem or pain point your project is addressing. The more real you can make the demo, the better.

person explaining

Selecting your finalists

After you bring in each of your shortlisted vendors to demo the new technology solutions they are proposing, you should shorten your list further, down to a final few. The demos should help you decide which vendors are the right fit for your project and your organization, but the final selection can still be difficult.

At Enginess, during our procurement consulting engagement with global furniture manufacturer Teknion, we identified a short list of six vendors to be considered for a demo. We then shortened the list of vendors further, based on the alignment of their offerings with Teknion’s business objectives and the total cost of ownership.

Here are a few considerations that can be useful during this stage:

  • How well does the new technology meet the needs of each set of stakeholders and users?
  • Did the demos raise any red flags, like glitches, flaky features or missing functions?
  • Was your technical team on board with the new technology?
  • If you’re going to be working with the vendor over the long term, are they a good fit for your project team and your organization?
  • Is the price (if discussed) in line with the new technology on display in the demos?

At this point, one of the most important considerations is making sure you’ve been asking your potential vendors the right questions from the start, so that you have all the information you need to make an informed decision.

An external consultant can provide some guidance and support here, because they have the expertise to know what to ask and when to ask it. And if they’ve been with you since the start of your procurement project, they’ll also know how to discuss your organization’s core business requirements in the context of the larger technology landscape. They can ask your potential vendors questions that get to the heart of your project’s business objectives, using technical language that will generate precise answers.

Seleting your vendor

After seeing all the demos, shortening your list of candidates to a few top vendors, and answering all of those last-minute questions, it’s time to do some decision-making. The way a final decision will be made is different for every organization, but it often involves comparing prices, thinking through delivery times, and considering any security issues.

You can choose to crunch these numbers and do this final analysis on your own, or you can bring in an external consultant to help achieve greater certainty.

And that brings us to the end of the RFP process. At this point, the last step in your new technology procurement project is to lock in your vendor, start your purchasing arrangements, and sign those contracts. But that’s a whole other book!

Chapter summary

  • Vendor selection is to new technology what interviewing is to hiring: so far in the RFP process, you’ve reviewed vendors’ proposals on paper. When you’re ready to start your selection process, you should bring in a chosen few for an interview.
  • Product demos are a key step in the vendor selection process. At Enginess, we recommend at least three demos per vendor: an initial call and brief demo, a longer demo with key stakeholders, and a technical demo to get technical team sign-off.
  • Demo meetings will be much more productive if you:
    • Prep your stakeholders before a demo
    • Limit the attendance at a demo by not inviting stakeholders who may want to add their two cents but aren’t key to the selection process
    • Arrange for stakeholders to have access to the new technology prior to the demo
    • Offer the vendor samples of your organization’s workflows or data so the demo can deliver a tailored end-user experience.
  • Selecting your vendor finalists involves compiling all the information you have gathered to date, from initial business objectives and technical requirements to your last demo notes, and weighing all of the pros and cons carefully.
  • Now, it’s time to select a vendor...and you’re done! The RFP process is complete.

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