The vendor selection process can be daunting, especially if the goods or services are unfamiliar or technical. Following these steps will help to ensure a successful outcome.
1. Analyze the organization's business requirements:
- Assemble an evaluation team including end users
- Define the product, material or service
- Define and prioritize the technical and business requirements
- Define the vendor requirements
- Publish a requirements document for approval
2. Perform a vendor search:
- Compile a list of possible vendors
- Select vendors from which to request information
- Write a Request for Information (RFI)
- Evaluate responses and create a "short list" of vendors
3. Prepare Requests for Proposals and Requests for Quotations:
Submission Details:
- Introduction and executive summary
- Business overview
- Background
- Detailed cpecifications
- Assumptions and constraints
- Terms and conditions
- Selection criteria
4. Evaluate the proposals and select a vendor:
- Perform a preliminary review of all vendor proposals
- Record business requirements and vendor requirements
- Assign an importance value for each requirement
- Calculate a total performance score
- Select the winning vendor
5. Negotiate a contract:
- List rank your priorities along with alternatives
- Know the difference between needs versus wants
- Know your BATNA (best alternative to a negotiated agreement)
- Define any time constraints and benchmarks
- Assess potential liabilities and risks
- Define confidentiality and/or non-compete requirements
- Plan for any future dispute resolution
- Assess all of these from the perspective of the vendor (i.e. walk a mile in their shoes)
Adapted from "The Successful Vendor Selection Process" on about.com: http://bit.ly/c12HI5
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