Vendor selection can feel like a high-stakes game of poker. You’re waiting for the right hand, hoping the cards you draw are just what you need to win big. But here’s the kicker: getting it wrong doesn’t just cost money. It can sink your entire shared services operation.
So, how do you make sure you don’t end up with a losing hand? Let’s talk about strategies to master vendor selection in your shared services organization.
Understand What You Need
Before you even think about reaching out to potential vendors, spend some time defining what exactly you need. Sounds basic, right? But you’d be surprised how many organizations rush into this process, only to find themselves fumbling around later.
- List Your Requirements: What processes are you looking to streamline? This could be anything from finance to IT services.
- Define Success: What does success look like? Are you aiming for cost savings, improved service quality, or faster turnaround times?
- Engage Stakeholders: Don’t forget to include voices from various departments. You want a comprehensive view of what’s needed.
Getting this part right is like laying a strong foundation for a house. You wouldn’t want to skip this step, would you?
Open Your Eyes to the Market
Now that you know what you need, it’s time to see who’s out there. It’s easy to get caught up in names you recognize. But remember, the most popular vendors aren’t always the best fit. Here’s what to consider:
- Diversity of Options: Check out vendors beyond the usual suspects. Sometimes, niche players can offer specialized solutions that the big guys overlook.
- Innovation: Look for organizations that are on the cutting edge. Vendors that prioritize technology and innovation will often bow to the evolving landscape of shared services.
- Reputation and Reviews: Don’t just go on their word. Dive into client testimonials and reviews. Real customers will give you the inside scoop.
Keep your eyes peeled during this search. You want to gather a list of potentials who align well with your defined needs.
Evaluate the Proposals Like a Pro
Now comes the fun part—evaluating proposals. But this is where most teams trip up. You have a mountain of information on your desk, and it’s easy to get lost.
Here’s how to cut through the noise:
- Rating Criteria: Establish a rating scale for each proposal. Consider factors like cost, experience, and cultural fit.
- Clarification Calls: Don’t hesitate to ask questions or request clarifications. You’d be surprised what you find out when you dig a little deeper.
- Demo Days: Ask vendors for live demos. This is your chance to see their product in action.
Take a moment to reflect on the proposals. You’re not just picking a vendor; you’re selecting a partner in your journey.
Check References and Case Studies
Once you narrow down your options, it’s time to do the back-end work. Checking references is crucial. Don’t skip this step; it’s your safety net.
- Talk to Past Clients: Ask tough questions. What issues did they face? How did the vendor handle them?
- Look for Similarity: Seek out case studies from clients in similar industries or facing comparable challenges.
- Assess Outcomes: What were the results of the partnership? Did they meet or exceed expectations?
These insights can guide you and help avoid future pitfalls.
Final Decision Making
Alright, you’ve done all your homework. Proposals evaluated, references checked. Now it’s time to make the call. But don’t rush this decision. Think about the long game:
- Align with Business Goals: Ensure the vendor can help you meet your long-term objectives.
- Be Mindful of Change Management: How will this vendor impact your internal team? Buy-in from employees is essential.
- Negotiate: Don’t be afraid to negotiate terms, pricing, and service level agreements (SLAs).
Wrap your mind around the full implications of your choice. It’s not just about who’s cheaper; it’s about who aligns best with your vision.
Onboarding and Relationship Management
Congratulations! You settled on a vendor. But the work doesn’t stop here. Onboarding is where the real partnership begins. This is crucial:
- Develop a Joint Plan: Work together to create a roadmap for implementation. Ensure everyone is on the same page.
- Continuous Communication: Establish regular meetings to discuss progress, challenges, and strategic adjustments.
- Feedback Loop: Create a mechanism for feedback from both sides. Address concerns promptly to nurture the relationship.
Approach this like a marriage—you both need to stay engaged and committed for success.
Monitoring Performance
Even after you’ve hit that “go” button, it’s important to monitor how your vendor is performing against the expectations you set. Check these key areas:
- SLAs and KPIs: Are they meeting the benchmarks you agreed upon? Keep it visible.
- Service Quality: Regularly assess the quality of service you receive. Is the vendor living up to their promises?
- Annual Reviews: Plan annual assessments to discuss the relationship, gauge satisfaction, and adjust goals as needed.
This phase is all about keeping your finger on the pulse of the relationship.
In Conclusion: The Art of Selection
Mastering vendor selection in shared services involves more than just finding a name on a list. It’s about gardening a potential partnership from the ground up—from need identification to collective growth.
When you invest time in understanding your needs, exploring the market, evaluating thoroughly, checking references, and nurturing relationships, you’re setting yourself (and your organization) up for success. Give each phase its due diligence, and you’ll end up with a vendor that feels like a natural extension of your team.
And if you want to dive deeper into shared services topics—transformation, innovation, and leadership—check out the THEGBSEDGE blog. I’m Vikrant Aglawe, a shared services expert with over 20 years in the industry. Let’s make your shared services journey a successful one.
