The pressure is on. You better make sure your selected vendor is top-notch, has incredible onboarding, works with you to ensure a timely implementation, and is priced competitively. In this post, we share the biggest pitfalls of the vendor selection process and how to avoid them.
1. Assuming you know all the players
Of course you know most of the big players in the market for your project or initiative - but what about those smaller, regional companies with products and services better suited for the future, or those partners you already work with who have another product line or service (that you don’t already know about)?
It’s easy to assume the major names in a niche have the best service offerings, but that’s not always the case. Sometimes, you can even catch a company early enough that you can help them mold their product or service offering into exactly your wants and needs. Having that kind of influence on is an incredible advantage that is often overlooked or taken for granted. One of the best vendors I’ve ever selected was relatively new to market but met all of our requirements (I’ll get to that next) and allowed us to prioritize their feature enhancements because we were one of their biggest customers. It was a match made in heaven.
2. Not gathering all the requirements
Organizations usually begin a vendor selection process by gathering requirements from stakeholders. Those requirements can vary from technical to legal. However, they usually are gathering requirements for their current needs only - not their future needs. Doing this can be dangerous and lead to time and resources spent implementing a product or service that is just going to be pulled out the following year.
Think long and hard about where your company will be in 5 years, or even 10. Do those requirements change drastically? You need a partner who can grow with you, instead of you outpacing them. Too often, overlooking future needs is one of the biggest pitfalls of vendor selection.
3. Having stakeholders who aren’t on the same page
We’ve all been there: the CEO and your department head don’t see eye to eye. So, who do you try to please? The right answer is neither. You need to have a sit-down conversation with both (or any stakeholder involved) and establish their expectations in an open forum. You can frame this as a ‘brainstorming session’ or an ‘introductory requirements gathering’ meeting to get everyone in the same room and on the same page. This will serve you well in many regards - you have other people to back you up once a decision is made on specific criteria, and you act as the mediator, which shows maturity and bipartisanism.
The last thing you want to do is take a solution to one of the main stakeholders that the other is a huge proponent of, only to be squashed and told to start back at step one. You can save yourself a lot of time and headache by having those crucial conversations early. They may be uncomfortable at the moment, but in the long run, you’ll be thankful you had them.
4. Not checking those references
You’d be shocked by the number of people who ask for references and then never bother to call them and ask about their experience! This is one of the most critical components of choosing a true partner over just another vendor. It would be like hiring someone without contacting any of their previous employers to see how they truly perform in a work environment.
The most important part of this step, in my opinion, is to ask whether they would use this vendor again if they did the project over. If the answer is yes, you’ve found your partner. If there’s any hesitation, you need to look elsewhere. Also, be sure to have this conversation with their reference privately. A lot of vendors try to ‘listen in to hear how they could improve.’ While they may have that intention, their reference is much less likely to give you a candid answer to your questions if they are on the line. For other questions you should ask during these reference checks, see our blog post about how you distinguish a vendor from a partner.
5. Not documenting the rationale for your decision
How many times has someone new started at your company and they want to re-evaluate all the vendors you use? While this can be a beneficial exercise for ensuring you have the best partners, too often it’s a rabbit hole that wastes time (and therefore money) by doing the same evaluation that was done the previous year, and the one before that, and before that, etc. (You get the point.)
Without the documentation of your comparison, criteria you used for evaluation, weights for scoring, vendors considered, and reasons they were eliminated, you could go through this same process every single year. At least with some documentation, someone can quickly review the evaluation to see if anything was overlooked. It would be a waste of your time to go through that entire process again, especially if nothing was overlooked, your company goals haven’t changed, and the required functionality is the same. Yet, many companies do just that, year after year. Meanwhile, wasting so much time and energy could have been prevented had anyone documented the evaluation process. It may not be fun or glamorous, but it’s necessary.
Hopefully this 3-minute read can save you tons of time and money by preventing these common mistakes that so many companies make during a vendor selection process.
Check out the Valify Marketplace to facilitate your vendor selection process!