Vendor selection

Vendor selection: the price of failure

Working with partners and third parties can be essential to bring additional capabilities, expertise and capacity into your organization. But the cost of selecting the wrong ones can be high.

Not only can you lose out in hard cash terms, but soured relationships, delays and lost management time can severely hamper you realizing planned benefits. 

Based upon our experience of helping many organizations select and then manage suppliers over time, The Berkeley Partnership can help you avoid some key pain points. 

Vendor selection: be clear on your rationale for using partners

We can create a partner sourcing strategy to help you identify and confirm the broader business outcomes you want to achieve plus what a partner can bring to you in that context. Too often businesses rush into selection without working this through, and end up with the wrong partner or waste time in a long, protracted selection process. With digital and agile development, it’s all too easy to quickly end up with a complex partner ecosystem before you’ve really set the direction, and agreed how you’ll get there.

Vendor selection: a tailored selection process to test key outcomes

Many organizations don’t deviate from the standard approach of a paper-driven request for information (RFI) followed by a paper-heavy competitive request for quote (RFQ) or proposal (RFP), often involving partners already known to them. 

The Berkeley Partnership can help you develop and implement a more constructive and discerning selection process by defining and reviewing proposal tender documents including statements of work (SOW). This will allow would-be vendors to demonstrate key skills of importance to you. 

Success is often mistakenly defined in terms of what percentage a vendor was beaten down on their commercials. While overpaying and commercial naivety should be avoided, there needs to be careful consideration of the cost-quality relationship.

Vendor selection: align commercials, relationships and delivery for results

Aggressive upfront negotiation can result in losing the partners’ ‘A-team’ people or driving them to recover margin elsewhere. We can help you contract through ‘story point’ or iteration for agile software development, rather than fixed price. This will enable proper scope, priority and sequence decisions to be made during the project without re-working commercials.

Vendor selection: working together 

Where multiple partners need to work together, we help you invest time up-front to agree common objectives and ways of working by defining a partner management strategy and vendor management framework. This undoubtedly will reduce the risk of later ‘finger pointing’ and misunderstandings. The Berkeley Partnership has seen weeks and even months wasted as a result of not spending a couple of days early on doing this. We can also help structure commercial frameworks and support partner negotiations to incentivize partners to work and collaborate together to achieve overall objectives.

Vendor selection: partner relationships

The focus can frequently be on the initial partner selection with mechanical contract reviews thereafter. Our management consultants will develop a more strategic vendor management framework to partner management and review which can pay dividends. This will include clear partner governance and focus proportional to their importance and value, together with a rounded assessment of the overall partnering objectives, current relationship health and discussion of future opportunities to bring further value. We can also help you review difficult or poorly performing partner relationships to see how to best to move things forward.

Vendor selection: first-hand experience

As The Berkeley Partnership is completely independent, with no alignment to any other organization, we can play a purely impartial expert role in helping you make the right vendor selection.

Our skills in vendor selection and mobilization are strengthened by our first-hand experience of actually delivering complex change. We know what it takes to ensure success and therefore what to look for in partners. We’ve also worked side by side with a number of key third party organizations, leading system integrators and software vendors, for example. This means our understanding of skills and capabilities in the marketplace often runs deeper than simply meeting them through the selection process.