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Each month, Tom Mochal, President of TenStep, Inc. presents project management tips and techniques for planning and managing a project. TenStep, Inc. has a comprehensive, scalable project management process called TenStep (www.TenStep.com), as well as a project lifecycle process called LifecycleStep (www.LifecycleStep.com). Tom has also published a popular book called Lessons in Project Management that can be purchased at www.TenStep.com. Pipeline readers receive 20% off any TenStep or LifecycleStep purchase by entering the coupon code of "Pipeline" in their purchase.
There are times when all organizations look for vendors to fill certain needs. The process is simple. However, depending on the vendor, this might be a lengthy process to complete. The following process can be used in most any selection process - package selection, vendor selection, hardware selection, etc. This process is described at a high-level and will require some drill-down on the details to make sure that it is performed with appropriate diligence for your project.
Gather and Rank Business Needs. It’s hard to select a
vendor if you are not sure what your requirements are, so the first part of
the project is to gather business requirements. This is similar to the
gathering of business requirements on a typical project. Many times, you
will not be able to determine all the requirements just by asking the
clients. The clients may not know enough to get the requirements 100%
complete and correct. On a normal project, you would add the rest using
scope change management. However, with a vendor selection project, you need
to get as many vendor requirements correct the first time. It may be too
late to discover missing requirements after a vendor has been selected.
Create Vendor Long List. After the requirements
are gathered, look for any and all vendors that might meet your needs. This
can be done by searching the web, looking at trade magazines, talking to
other companies, etc. The purpose of this step is to gather a comprehensive
(but not exhaustive) list of vendors that you want to consider further. This
step helps ensure that there is not an obvious candidate of whom you were
not aware.
Create Vendor Short List. Perform an initial,
high-level evaluation of the long list, looking for obvious reasons to
eliminate some of the alternatives. For example, certain vendors may be too
new. Some may be obviously too expensive. The purpose of this step is to
create a short list of potential vendors that look like they will have a
reasonable chance of meeting your needs. You should send your Request for
Proposal (RFP) to the short list. (If the long list is not too large, you
could send the RFP to all of the vendors. But, you must narrow down the
vendors to a small enough number that you can compare and contrast them for
your final selection process.
Evaluate Vendor Short List. This can be the
hardest part of vendor selection. You must map the vendor capabilities
against your requirements and weighting factors to determine which vendor
most closely meets your needs. You can also interview the vendors, make
vendor site visits, etc. Usually some type of numerical calculation is made
based on how well the vendor meets each requirement, multiplied by a
weighting factor. The vendor with the highest score across all requirements
should be the one that best meets your needs. When you have completed this
step, you should have a prioritized list for the vendors that best meet your
needs.
Make Final Selection and Negotiate Contract. In many organizations, the project team makes the final recommendation and then turns the process over to a formal Purchasing or Procurement organization. However, at this point you should have all the required information to make the choice. If you are only selecting the top vendor, you should have the numbers available to make your recommendation. If you are selecting a number of potential vendors, you can pick as many of the top ranked vendors as you need to meet your needs.
When the final selection is made, you may still have to negotiate a contract or license. If that process does not proceed in a satisfactory manner, you should be prepared to move down to your second choice, and your third, as long as those vendors still meet your minimum requirements.
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