5 Steps to Better Vendor Selection

November 22nd, 2016
Vadim VladimirskiyFounder & CEO, Nerdio

Managed services providers face few decisions more important—or more challenging—than selecting technology vendor partners. The right vendor can accelerate technology implementation and new service introduction. The wrong vendor can hinder business evolution and send your company’s strategy off the rails.

Finding qualified, complementary vendors can be an exhaustive process, but here are five steps to make the search more efficient and more effective.

Step 1: Determine Your Business Requirements

Selecting the right software, hardware or service hinges on knowing the technical and business requirements the solution must meet. Assemble an evaluation team to collect as much information as possible: Identify and interview a range of stakeholders and end users to understand their needs and goals, and create a “must-have” list and “nice-to-have” list to determine which solution best fits your organization and strategy. Also review existing internal reports and data for additional information about operational pain points. And last but not least, create a budget—and stick to it.

Step 2: Identify and Research Qualified Vendors

Once you’ve determined what kind of solution you require, you can begin researching which vendors meet your criteria. The web is an excellent resource for preliminary insights into vendor performance, strengths and weaknesses, executive backgrounds, and other factors. Send each qualified candidate a request for information, and conduct a thorough team evaluation of their responses.

Also ask vendors for references within the MSP industry. Satisfied organizations should be willing to share their experiences and insights, including how long they’ve been a client, how the vendor addressed their specific operational needs, and whether its customer service team is responsive and efficient.

Vendor list

Step 3: Ask the Right Questions 

While online research and client feedback are vital, they’re no substitute for face-to-face interaction. Beyond discussing basic partnership terms, mutual goals, and overall compatibility, evaluation teams should ask questions to determine how long the vendor has been in business, its overall financial health, its partner certifications, and whether its engineering team can successfully handle the product or solution you’re looking to implement.

Some fundamental questions to consider:

  • Will the product integrate seamlessly with legacy systems?
  • How easy are product set-up and user training?
  • Does the partnership agreement incorporate training into implementation costs?
  • What kind of support does the vendor offer once the sale is complete?
  • How does the vendor manage updates and upgrades, and will the process disrupt day-to-day business?

Step 4: Schedule a Product Demonstration

Most qualified vendors offer free trials, enabling potential clients to test features, benefits and usability, so be sure capitalize on the opportunity. In addition to ensuring the product or service offers the bells and whistles you need, ask questions about scalability and reliability to guarantee the solution matches your current demands as well as any requirements that may surface as you grow and evolve.

Step 5: Negotiate a Clear, Comprehensive Contract 

After you’ve identified the vendor that best meets your objectives and price range, develop a contract that stipulates deliverables, timeframes and budgeting. Be clear on all terms and conditions in the contract, including vendor compensation (total cost, payment schedule and financing terms). Remember that you’re allies, not opponents, and write a contract that’s fair and beneficial for both parties. An equitable deal and successful implementation can form the foundation of a trusted partnership that extends for years, even decades.

Vendor selection is a critical part of effective MSP operation. Following these steps can mean the difference between smooth sailing and constant storms.