Archive for the ‘Tech Acquisition’ Category
December 15, 2007
One of the primary goals in managing a technology acquisition is to objectify what is ultimately a subjective decision on which vendor and technology is best for your business and situation. The challenge is that most people are by nature not objective. There’s a good chance that some or all of the decision-makers involved already have a bias towards one of the vendors. So how can you address this challenge and objectify the decision-making process as much as possible? Here are a few suggestions that have worked for me in the past:
- Make the most biased people, or a designated representative who has their respect, a member of the vendor selection team. If you challenge them to conduct a thorough and fair research and evaluation of each vendor before making their opinion known, you will be surprised at how many will change their mind by the end of the process.
- Utilize a Scoring Matrix to objectify the decision by breaking the overall decision down into many smaller decisions and weighting each component score appropriately based on priority. The key is to set the categories and sub-categories and prioritize them prior to contacting vendors. Then build the research around answering the questions that will help you score each sub-category of the Scoring Matrix. Even if the decision-makers select a different vendor than the one that scores the best overall, they will at least be making an educated decision.
- Document all research results to support the Scoring Matrix results and back-up the selection team’s recommendation to the decision-makers. I once had a new IT executive join my company the week that we made our vendor recommendation to the decision-makers. He visited me and said he had used the other vendor successfully at his last company and wondered why we hadn’t selected them. I was able to hand him a 2 inch binder and say “here’s why this vendor is better for our company and our specific situation”. I never heard back from him on the matter. I suspect if I hadn’t documented the results, he would have overridden our recommendation given that he was ultimately going to be responsible for the new vendor relationship.
- If you are leading the vendor selection, take yourself out of the voting process and become strictly a facilitator of the vendor selection process. This way your focus will be solely on ensuring you conduct a fair, thorough, and objective process. It will also allow you to address vendor bias without being accused of it yourself.
- If you have an entrenched incumbent vendor, don’t sell the project as an opportunity to replace the vendor. Instead, sell the benefits of competition in creating negotiation leverage with the incumbent vendor. A fair and objective vendor selection process will take care of identifying whether there is a vendor that better fits your current business and situation.
Bottom Line: When managing a technology acquisition, confront vendor bias head-on to ensure an objective decision-making process produces the best vendor and technology for your company’s specific situation.
Posted in Tech Acquisition | Tagged LinkedIn, negotiate, negotiating, Negotiation, procurement, technology acquisition, Vendor Management, vendor selection | No Comments »
October 22, 2007
If a sales team treats a potential buyer to dinner, is this considered investing in relationship building or is it a bribe? Some buyers say it’s unethical to allow a vendor to pay for a meal as it may be construed as buying favor (a bribe). I think taking a hard line on this limits the opportunity to build relationships with prospective vendors.
A better approach is to define a clear policy of reciprocation from the beginning with all vendors. For example, if your team will be visiting a prospective vendor’s site, allow them to treat your team to dinner only if they agree to you treating their team to dinner when they visit your location. If each vendor has this opportunity, they gain no advantage or favor. By doing this, you will create an opportunity to build a relationships that will help you evaluate the people in each company. More importantly, I have found from experience that these relationships will grow and become the foundation for success later in the relationship. When things get rough, you need to be able to pick up the phone and call someone for help in resolving the situation. It sure helps if you have met that person and spent some time getting to know them.
Bottom line: Promote reciprocal investment in relationship building to ensure you don’t cross an ethical line.
Posted in Tech Acquisition | Tagged LinkedIn, negotiate, negotiating, Negotiation, procurement, Tech Acquisition, Vendor Management, vendor selection | No Comments »
October 15, 2007
Most people are not objective in selecting vendors. Many have a favorite before the selection process begins. Your job in leading a vendor selection is to objectify the decision as much as possible. How do you objectify what is ultimately a subjective decision in the end? I have found the best approach to be breaking the big decision down into many small decisions. Start out by creating a scoring matrix:
- Define 3-6 categories to evaluate vendors (ex: Functionality, Technology, Partnership, and Costs)
- Divide 100 points (100% of your decision) between these categories based on priority
- Define 3-8 sub-categories under each category
- Divide the major category’s points up between these sub-categories
You now have a scoring matrix that will help align scoring with your priorities. Each point represents the percentage of the decision. As you begin researching vendors, make sure your research will help you fairly and consistently evaluate each vendor in each sub-category of the scoring matrix. I like to build RFPs around the scoring matrix by including questions that will help me score each category. Additionally, I will ask questions of references that will help me validate the vendor’s responses.
Once you complete your research, score each vendor in each sub-category of the scoring matrix. Document clearly how you are determining each score. The completed scoring matrix should tell you which categories vendors are strong in and which vendor is closest to your priorities (remember, the points were allocated based on your priorities). While the decision-makers will not always select the vendor with the highest score, at least they will be making an educated decision.
Executive decision-makers: Introducing this tool to your project teams will result in a complete and objective assessment, enabling you to make an educated vendor decision.
Posted in Tech Acquisition | Tagged LinkedIn, negotiate, negotiating, Negotiation, procurement, Tech Acquisition, Vendor Management, vendor selection | No Comments »
