Daily Archives: August 21, 2012

Best Practice Technology Vendor Selection for True Multi-Nationals Part III: RFX – You’re Missing the Most Important Point!

In this post we continue our series on best-practice vendor selection for your enterprise e-Procurement and e-Sourcing solution. As per Part I, this series specifically relates to the selection of technology(-based) vendors for your enterprise software needs, and e-Procurement and e-Sourcing solutions in particular (as reiterated in Part II).

What is the ultimate goal of your organization’s technology acquisition project? To get an e-Procurement/e-Sourcing system? No. To increase efficiency / save money / get more spend under management? No. To get satisfaction? No.

The ultimate goal is your organization’s success. That’s the only metric you care about when initiating the technology acquisition project (TAP) dance . And if your organization is a global multi-national, then your organization’s success depends on the vendor’s ability to deliver globally. Not how many boxes the vendor can check on some random feature / function check list. Because, as we discussed in our last post, where large-scale roll-outs are concerned, there are only a few standalone best-of-breed sourcing and procurement technology vendors that will make the shortlist for a given organization.

One thing that your organization needs to be aware of is that this is not 2002, this is 2012 and both e-Sourcing and e-Procurement functionality is more-or-less commoditized among the established vendors. Sure, some will have features G, H, and I while others have features J, K, and L, but they all have critical features A through F. And as for features G through L, if they are valuable, the other vendors will catch-up, and the time it will take them is usually less than six months nowadays, and if a feature is made a contingency of a deal, the catch-up time is probably shorter still!

Another thing your organization needs to be aware of is that starting with a short-list of vendors that it is fairly certain can meet its needs will not only significantly reduce the length of the evaluation process (as it is no longer a question of “can the vendor meet my needs” but a question of “is this the best vendor to meet my needs”), but also significantly reduce the organization’s risk. If the organization needs to operate in forty countries and twenty languages, and doesn’t do it’s homework, it could end up wasting six months evaluating three vendors who don’t have a reference outside of the US and UK and who don’t support customers in a language other than English. If it has a deadline of nine months, what does it do? Either it takes the last vendor in the pipeline, if any are left, or rushes out to find another one, with no time to consider how appropriate the vendor it is for its needs or its organizational culture.

Which is another point that is often missed in the traditional implementation of an RFX cycle. Cultural considerations are typically ignored in technology selection, ignoring the fact that people have to use these systems — people who work, think, act, and like to conduct business in a certain way (and like to interact in a certain way with technology and technology / service providers). As a result, good technology selection is not just a matter of check-the-box when a strong vendor interaction is required. If two or more vendors are more-or-less equal from a functional/process selection, the tie-breaker should be cultural alignment. Does the vendor have the same goals? Work to the same metrics? Conduct itself in a similar manner? Give your customers and suppliers the same respect? These are important, but often overlooked, questions. Don’t forget them.

In our next post we will dive into more best-practices to truly take your technology acquisition project to the next level now that your RFX process is back on the rails.