The Project Manager's Guide to Vendor Selection

As a project manager who may be looking for a solution to meet your software or service-related needs, choosing the right vendor is absolutely critical.

It isn't just about the product or service (though this is obviously important); your vendor is going to control maintenance, repairs, and general communications regarding the delivery of their product. The right vendor is going to operate as a business partner, helping you every step of the way. The wrong vendor can be nothing more than a hindrance.

Assess Your Organization's Needs

Begin by specifying what your project or organization seeks to gain through this new product or service. Your organization should have a clear outline of both its needs and its desires before you begin to compare different vendors.
When looking for a software solution, your organization could need:

·         Remote access to data

·         Persistent data storage

·         Easy file sharing

·         Consolidated reporting

The list of potential features is virtually limitless, but once you're aware of the features you require, you can begin to look for the products that are going to meet these needs. It's important to pare down to what is really necessary; otherwise you could end up with a solution that is both more expensive and more robust than you require.

When looking for software solutions, you will often need to find solutions that can be integrated into your existing software, or that can be customized to work with your internal applications. Some solutions make it easier to customize them than others -- all of these factors have to be considered in order to plan your project correctly.

Demo the Available Products

Most products are available in the form of a demo copy, which will give you greater insights into whether the product will work for your organization. If possible, port a representative sample of your company's data into the available products and test out your complete workflow. This will give you a better idea of how the system would be integrated into your company's existing business processes. With more expensive Enterprise level solutions, a representative of the company who provides the product may conduct an onsite demo or webinar for your project team.

When demoing products, make sure that those who are going to be working first hand with the products are available to understand what they offer, or ideally, test them out. They are the ones who will notice issues with the product's new work flow, or features that may be missing.

Assess Security and Regulatory Standards

A solution that is not properly secured is a ticking time bomb; it isn't a question of whether it will become a problem but rather when. In addition to this, most businesses have internal and regulatory standards that they need to comply with, in terms of what data they keep and how their data is stored.

If your vendor can help with your security and regulatory compliance, this takes a significant burden off of your organization. At bare minimum, you need a solution that is going to adhere to your organization' own internal standards.

Calculate the Total Cost of Ownership

Nearly every solution has a budget attached. When dealing with vendor selection, there are two costs: the upfront cost to purchase the solution and the long-term cost of maintaining and updating it. Software solutions are going to need to be patched and upgraded over time and continued support and development may cost more. Additionally, solutions generally have a substantial upfront cost, both in terms of the software licensing itself and any hardware upgrades or custom software coding that would be needed.

You will need to compare both short-term and long--term costs of each vendor to make sure that they all fall within your budget. A software solution may be affordable (or even free) to adopt but may cost a lot in maintenance and upgrades later on.

Check References and Reviews

At this stage, you should have a fairly good idea of which solutions are right for your project, and which solutions are going to be able to deliver what your company needs. However, you aren't done investigating the vendor providing the solution. You can begin by consulting online business references and reviews. Any vendor can promise to deliver. Reviews and references will tell you whether they have delivered in the past.

Most companies have reviews available online; if the vendor you're looking at does not, they may be a new, untested company. Every company is going to have some amount of negative reviews; what's most important is how they deal with these reviews. Look for companies that respond politely and professionally to inquiries, even if these inquiries are negative. For large or especially critical implementations, you may want to consider working with a research and advisory partner such as Gartner.

Finding a vendor is a time-consuming but important part of a projects process, and you need to find a vendor that offers the product you need at a cost your organization can afford. Not only do you need software that works as desired, but you also need software that is going to be well-maintained -- software that can grow and scale with your business. By using the above tactics, you should be able to find a reliable vendor with a robust solution.