Outsourcing Roadmap Index

Vendor Selection: Overview

For some, vendor selection is an art itself for others it is a process to meet the right IT service vendor. Of course, as with locations, you can decide to go by the crowd and select one of the well known outsourcing vendors. Definitely, there are advantages to follow this approach;

You do not leave the “beaten path”

Plenty of references

Sound experience

You can simply pre-select a few of the well known IT Outsourcing vendors (quite easy to find those) and run an evaluation on them to check how far they can align with your requirements and outsourcing strategy.

You also need to consider that the process of selecting an outsourcing location and vendor(s) will increase your costs.

EuroITX uses a well defined methodology, called RapidScan, to assist ITO services buyers in vendor selection. The process boils down to a single, focused perspective on a vendor and its features.

The EuroITX.com vendor selection process represents the overall view of a vendor, its initiatives and capabilities.

The entry conditions to vendor selection;

a sound outsourcing strategy had been worked out

the outsourcing location had been selected

We use and recommend the following process to find and meet the right vendor;

1. Planning. Decision must be made on your vendor evaluation strategy.

Understand your own organisation and its needs

Prepare the Request for Proposal document

Develop a business case

Define the retained organisation

Internal definition of the successful service provider

What type of partnership/organisation do you envisage?

How many evaluation rounds are you going to have?

What are your preferences for each evaluation rounds

What are the evaluation criteria?

Who is going to participate in the evaluation (external and internal resources)

What is the procurement methodology/process you are going to use?

What is the time frame?

Often the vendor evaluation process includes some kind of evaluation grid and a Request for Information (RFI) document. Prepare them beforehand.

2. Research on available resources in the target geographies. The reason for this research is to get an overview of companies you might consider to evaluate. Research includes finding and contacting;

IT branch organisations

IT industry web portals

Chamber of Commerce and Embassies

Business support organisations

Government organisation

IT companies

They can all point you to companies and other relevant resources.

As the outsourcing strategy had already been worked out and the location(s) had been pre-selected most of the above information is readily available. Now we make our focus sharper to find companies capable to provide services we are looking for. Research on individual companies will give you a much more clear picture on capabilities, culture, language, etc.

After the desk research had been completed and the outsourcing location is still promising make a list of pre-selected companies and list your first opinion on them. Again, your outsourcing strategy and evaluation planning will largely determine your preferences and vendor evaluation method.

3. Request For Information (RFI) package. With an RFI package you request the organisation you are evaluating to submit documents where they have the chance to answer your questions, introduce the organisation and elaborate on any issue they and you might find important.

Why should you care about an RFI? This document is outmost important as this is, most probably, the first chance for an organisation to express itself in a structured way and answer YOUR questions. Beside the contents conclusions can be drawn from the language, grammar and completeness of the document. You can estimate how much time the organisation spent to prepare the submitted document or how much care was given to make a good impression on you.

To be fair, make sure that the organisations know how their response for the RFI will be evaluated.

So, what should be the contents of RFI package?

First of all you should have a quick overview of the companies you are evaluating. The RFI package will include a Vendor Evaluation Grid and a Vendor Overview Sheet. Second, you should ask the prospective companies to further elaborate on a number of issues you find important to support your decision making process. This is their response to the Request For Information (RFI) document. Before you can prepare the Vendor Evaluation Grid you must prepare your RFI document and design the RFI evaluation criteria set. This later should be conform with the evaluation guidelines set forth in the Planning phase.

Should you ask about financial issues? Yes, you can. But do not be surprised if you do not get a (clear) answer. Many companies, especially in low cost countries, do not have to report their financial positions. They are simply not accustomed to it. It is not that they have anything to hide simply trust must be built first. The same applies, at this point, to Business Plans and detailed strategies.

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