Software Vendor Selection – Part 3 of 3
In Part 1 – Establish the Business Case- we discussed how you establish the benefits case for your project – what sort of technology solution will enable your business to perform better and deliver a tangible improvement.
In Part 2 – Selecting the Right Solution- we looked at how you find the right solution, how to consider the network of people who will deliver and support that solution, and then how to best to set about the formal selection process.
In Part 3 – Establishing the Partnership- we will discuss the selection process, agreeing the deal, and how you transition from procurement into a successful partnership for delivery.
Part 3 – Establishing the Partnership
3.1 The selection process
This is where Searchlight’s experience can really help. We have a proven approach to vendor and partner selection, with accelerators to guide you through the stages, whether you opt for a rapid ‘lite’ selection process, or a ‘full fat’ rigorous process aligned to best-practice procurement standards where commercial rigour and auditable transparency are important.
The main steps in selection:
- Understanding the business requirements, including the pain points to be addressed and identifying your shortlist of possible providers
- Running RFI (Request for Information) and RFP (Request for Proposal) covering all your requirements and the full application landscape including integrations
- Defining your selection criteria, and evaluating proposals to reach preferred bidder
- Final commercial evaluation through BAFO (Best and Final Offer)
- Negotiating contracts, SOW (Statement of Works) and service agreements for implementation and ongoing support.
- Mobilising and launching a combined team to deliver your solution
Maximum engagement drives maximum value to get the best deal.
3.2 Agreeing the Deal
Engaging Searchlight in procurement selection, our clients have typically saved an additional 10%-20% over and above the typical discounts offered by vendors. However, it is key to ensure an appropriate balance is achieved, as a deal needs to be ‘good’ for all parties to enable an effective partnership to form.
Having briefed vendors via the Request for Proposal (RFP), and documented vendor selection criteria, we focus on critical criteria to select the preferred vendors.
It is useful at this stage to undertake workshops with preferred vendors, to ensure there is a full understanding of the requirements before writing up a full statement of works – with clearly defined deliverables and responsibilities on both sides.
Before finalising the commercial model, it’s advisable to check references, before awarding contracts – for the full life cycle of project delivery. It’s easy to be taken in by a slick sales pitch so do take the time to speak to actual recent customers.
3.3 Moving from Procurement to Partnering
Once the deal is awarded and the contracts signed you transition from procurement mode to partnering. Often the delivery team is a partner organisation, not the software vendor, so the scope of work needs to be carefully crafted to align. It’s easy for the vendor to make promises (‘Oh yes of course you will have this feature’) that is not in scope to be delivered without a lot of extra work or extra licenses. Everything needs to be in black and white.
It’s also likely that the majority of the team that sold you the product & services will not be the same as the team who will support you through implementation. The brightest and best sales and pre-sales consultants will be off pitching for the next deal – you need to ensure that your delivery team are fully up to speed on what has been sold, and what they are expected to deliver.
Get them to re-commit to deliverables and milestones. You don’t want to have to keep going back to what was in the contract every time a change is raised, but it’s vitally important that all delivery parties understand the scope at the outset.
When creating the master services agreements (involving appropriate external legal advice), you should also create your vendor software & support contracts and align this to your support operating model.
Now procurement is done, and you’re ready for delivery to begin!
At Searchlight Consulting, we have helped our clients select a range of solutions including Finance, complex ERP, CRM, Supply Chain management (SCM) and EPOS solutions across a range of industries and from a wide range of software vendors.
Contact us today to learn more about how Searchlight Consulting can help with your software vendor selection.
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