Best Practices in Software Vendor Selection

Best Practices in Vendor Selection Dan Miller, Advantiv Solutions

About Advantiv
Started in 1996
Product: DecisionDirector ®
Mission: Deliver stakeholder collaboration and decision support throughout the entire lifecycle of software planning, selection, and implementation projects
Benefit: Reduce the time, cost, and risk of complex projects while increasing stakeholder satisfaction with the process and the outcome
Experience: 100+ projects in Higher Ed, State & Local, DoD, and Healthcare involving 250+ entities, 75,000 stakeholders, ~100 vendors, and dozens of consulting firms

About Today’s Webinar
Lessons Learned in Vendor Selections
Best Practices
Common Mistakes
Great Advice from Peers
Vendor Perspective
Emerging Practices
Q & A

Lessons Learned
Vendor Selections are like family vacations (with in-laws – all of them)
A lot of people are affected, most won’t want to go
Some will be happy and some won’t be
You probably don’t want to be in charge, but knowing you, you will be
The best selections are well-planned IT-enabled business projects that yield much more than a chosen vendor
There are good techniques but no good short-cuts

So, How Did The Selection Go?

These are Business, not IT, Projects
Gartner CIO Agenda Survey – Since 2005, #1 senior management expectation of IT is “Improving Business Processes”
The most successful projects are “Business-driven/IT-enabled”
Clear support of strategic objectives and a strong business case for the investment

Begin at the Beginning
Establish a clear across-the-board understanding of the business need
Create functional and IT partnerships
Prepare the preliminary business case and presentation
Gain necessary executive sponsorship and support
Educate the troops
Create a project charter
What will be achieved and who will be responsible
How team will be organized and decisions will be made
Criteria and requirements for success
Risk factors and risk mitigation
Establish a game plan

Begin at the Beginning
Identify affected business processes
At a minimum, name and define them and then evaluate and prioritize them
Ideally, collaboratively document key processes
Understanding your existing business processes will help in many ways
First time for many to see the process “from above”
Reveal immediate opportunities to improve
Shared/validated sense of process priority
Guide requirements and vendor demos
Key to Fit/Gap analysis and implementation planning

Requirements, Solicitations, and Demos
Identify business and technical requirements
Should tie to business processes
High level reqs are easier to write / hard to measure
Detailed reqs are harder to write, but easier to measure
Prepare solicitation (RFP, RFI, etc)
Many good examples available – strive for quality
Prepare for demonstrations
Scripts based on most important and realistic scenarios
Tie to requirements for cross-referencing
Establish clear expectations, but give some room

Due Diligence
Early due diligence to determine potential suitability
Market focus, technology platform
Subsequent due diligence
Financial stability and future direction
Reference checks – their list and yours
Demonstrations based on your key scenarios
Beyond the sales team – management, product development, implementation, training, support
TCO
Contractual terms and conditions

The Vendor Perspective
Technology sales is hard, expensive, and risky
Big opportunities can cost $500k to chase, win or lose
Lots of people, hoops, and pressure to pursue a sale
Successful sales people personally invest in their prospects
Process vacuums will be filled
If you aren’t providing information, vendors will seek it
If you don’t establish a protocol, vendors will
Credibility is something you can lose, too
Don’t ask vendors to do something that you would not be willing to do, e.g. fly a team out… next week
The partnership mindset begins with you

Due Diligence – Don’t Forget Yourself
Is your organization ready for this project?
Executive sponsorship and support
Financial commitment
Stakeholder commitment
Project organization and governance
Do you have or can you obtain the necessary skill and experience sets?
SMEs, technical, project mgmt and administration
Do you have sufficient resources?
Staffing backfill, project work space

Common Vendor Selection Mistakes
Not Enough/Too Much Time
Not Enough Research
RFP is a Surprise / Poor Quality / Scoring Unclear
No Plan for Demos
Insufficient Due Diligence
Insufficient Education and Buy-In
No Rules of Engagement
Fool Me Once…
Entering Negotiations Alone, Naked, and Cold

We’ve Seen Them All…
Pre-RFP Planning
Limited Stakeholder Involvement
Poor Requirements
Purchasing, Finance, and Legal involved late
Vendors gain access and information however possible
RFP
Borrowed
Re-purposed
Confusing to vendors / addenda
Timing may surprise or put-off some
Vendor Evaluation
Vendor Canned Demos
Limited Due Diligence
Unclear Decision and Project Governance Models
Weak Contract Negotiations
Pre-RFP Planning
Stakeholder Involvement Req’d
Excellent Requirements
Purchasing, Finance, and Legal involved from the beginning
Vendors provided controlled access with rules of engagement
RFP
Written to suit purpose
Clear and impressive to vendors
No surprises
Vendor Evaluation
Good, scripted demos
Solid Due Diligence
Clear Decision and Governance Models
Highly-Effective Contract Negotiations with Win/Win
Much Better Selection Process Poor Selection Process

“ It’s the Design, Not the Features”
Jim Ritchey and Phil Hill of Delta Initiative
Features are important but the application design (monolithic vs component) must be right for you
“ Leverage the custom requirements – internally and with the vendors”
Charlie Moran, Moran Technology
Vendors can’t do everything, so use their scope and rough pricing information from the RFP response to challenge or confirm unique stakeholder requirements and get down to what is really worth paying for

“ Remember, it’s a people problem”
Ed Cornelius, President, Collegiate Project Services
Without an enterprise-wide engagement process it’s often difficult to get consensus going forward
“ While several vendors may provide solutions that meet your needs, all vendors are not alike.”
Vicki Tambellini, General Manager, The Tambellini Group
The differences between vendors can be great. The software you select is a small part of successfully meeting your requirements.
Vendor differences include various approaches to training, implementation support, help desk, upgrades and new releases, business policies and legal risks.
It’s worth the time to understand all of the details behind the differences in the vendors and their solutions and approaches in order to make the best “fit” decision for your institution.

The Reverse Auction
Matt Gibbs, Ohio University
Five Year, $17 Million Network Upgrade
OU’s OIT Provided:
Provided detailed equipment specifications
Established strict vendor participation criteria
Engaged stakeholders early and often
Web-based reverse auction system
141 bids in 84 minutes from several pre-qualified vendors
Achieved initial purchase pricing 16% ($145k) below state contract
Anticipate ~$3M in savings over 5 years

The Request for Comment (RFC)
A much more open and extended opportunity for the buyer and vendors to interact
Months before any RFP, the buyer makes key process documents available in a collaborative environment for review and comment by vendors and integrators
Feedback and suggestions provided by vendors could be used by buyer to refine process ideas
Eventually, requirements would be “hardened” into an RFP
Vendors and SI’s could make very well informed bid/no-bid decisions

What We Are Seeing More Of
Heightened due diligence – internal and external
Open, transparent, intentionally well-managed selections
Commitment to stakeholder education and participation
Strong business cases
Cross-discipline teams
Business process documentation and management
Faster, better, easier tools make this possible
Vendors engaged earlier and more effectively

Contact Info Dan Miller, Advantiv Solutions [email_address] 866.966.2911 x101

Best Practices in Software Vendor Selection

by Advantiv Solutions, LLC on Apr 27, 2010

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