Dealing with Technology Vendors: a Buyer's Methodology
Once You Start Dealing
Now you can start talking with the vendors. But bear in mind the following:
6. Beware the bait and switch: those promises of future functionality. Second only to "The check is in the mail," is the claim, "It's in the next release". Ask—and find out— what's in the product today. It's the only way to ensure you're comparing apples to apples, not kumquats.
7. Look for reference sites—preferably in the insurance industry. The vendor will give you references, but those names are likely to be advertisements; what you want is the realistic perspective. Once again, it pays to do some legwork. Network with people from your professional associations. Contact the vendors' users groups; ask specific questions about the vendor and what it was like to work with them. You'll gain knowledge that can be brought to bear when you actually confront the vendors. As they say, knowledge is power.
8. Look for a vendor that has the proper spirit of partnership. Ultimately, you and the vendor will be solving your business problem together. If what you're looking for is the chance to build a truly innovative solution that delivers clear business value, it pays to enter into the relationship in the spirit of partnership. Contrast this to the procurement mentality that often prevails at this point in the process, where buying organizations focus exclusively on getting the lowest possible price out of the vendors. Keep in mind that there are good reasons to want to be a profitable customer for the vendor; for one thing, it gives the vendor greater incentive to support you. It also increases your priority with the vendor, once you're part of its installed base.
The RFP Process
Many RFPs are little more than long laundry lists of check-box features, which the vendors willingly check off. Organizations that get inundated in this manner by the RFP process generally end up no closer to a buying decision. To get out of holding pattern at this stage of the process, Doculabs recommends the following:
9.Have a plan for scoring RFP responses—before you sit down to evaluate proposals and compare products. Once again, the idea is to impose objective criteria that will ensure a level playing field. And you don't want the evaluation process to degenerate into a food-fight of features and functionality. So build a consideration of implementation issues into your evaluation criteria, with a focus on the process of application development, implementation, and ongoing use.
10. When you review vendors' proposals, look for honesty. Beware the yes-men that have all the checkboxes checked—"yes, we do it" —but provide no details as to how they do it. It's okay for vendors to say no; too many yes's is suspect.
11. Have the vendors troop through to present their proposed solutions. This venue allows you to ask more questions and find out what, specifically, their product will for you, and how, specifically, it will do it—along with questions concerning implementation. Invite stakeholders from throughout your organization. But make sure that it's you, not the vendor, who develops the agenda for the vendor presentations, and have a strong facilitator on your side to hold them to it. Remember, you're the buyer!
A good way to make sure your issues get addressed is to develop a scoresheet that lists and weights all of your critical requirements. The scoresheet can be used by all presentation attendees to provide a clear indication of how each solution stacks up in the areas you consider most important. Along with the aforementioned strong facilitator, such a scoresheet also helps ensure that you get to see the functionality you want to see demonstrated during the presentation. But putting together such a scoresheet presupposes you've already developed a good requirements definition (see Step 2, "Legwork").
12. Don't allow the vendor to unilaterally dictate the deployment schedule or timeline. While it's healthy to keep an open mind, ultimately it's your project plan. Prescribe your own deployment priorities and timelines, based on your implementation requirements. And don't let the vendor persuade you to bite off more than you can chew; we all know that smaller rollouts succeed more often than the bigger ones do, and that applications that do a few things well get better results (and greater user buy-in) than those that try to do everything.
And there you have it—a buying methodology that ensures a sound evaluation process, at the end of which is a sound buying decision. With the demand for reducing costs and faster processing in the insurance industry, not to mention the movement toward web-based services, the chances are you'll be looking at some technologies in the very near future, and putting this methodology to use.
James K Watson, Jr., is President and Linda Andrews is a senior technical editor with Doculabs, Inc. (www.doculabs.com), an industry analyst and consulting firm that helps companies plan, select, and optimize technologies for their business strategies. You can reach them at 312.433.7793 or [email protected].
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