IT vendor assessment guide

for cooperatives
Supported by Rabobank Founation

Martine Jansen, Ruben van der Aa & Thijs Verwaal

May 22nd, 2019
Contents
• What is the purpose of this document?

• Identify business drivers

• IT as business enabler

• Vendor selection process

• Define business requirements
• Identify potential vendors
• Request for proposal
• Vendor demo’s
• Vendor selection & Due Diligence
• Contract negotiation

• Critical success factors

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Purpose of this document
It is important to think about how IT solutions can help you in obtaining strategic
objectives. Especially “identify business drivers” and “IT as business enabler” are
essential to help you think about how IT can help your organization.

This document provides you with a set of questions which you will need to form an
opinion on:
1. How IT can drive business.
2. IT vendors and how to prepare for a selection of the right IT solution.

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Identify business drivers
• Set strategic objectives for your organization (short, medium and long term)

• Prioritize the strategic objectives

• How could an IT solution be a potential business enabler for the top priority strategic
objective(s)?

• Don’t try to chase one strategic objective with a solution that solves everything
(unrealistic), instead focus on part of the organization that can benefit from an IT
solution.

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IT as business enabler
• Which key feature of the IT system is my must-have to meet strategic objectives?

• How will this key feature of the IT system enable my business to grow?
Could it also enable a reduction in costs / reduction of risks?

• Is the IT system able to only provide this key feature, without providing additional
complexity by introducing much more additional features?

• Which additional factors could have an effect on the potential success of this key feature of
the IT? What are the potential risks?

• You could do a cost-benefit analysis to determine if investing in IT makes sense.

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Vendor selection process
When acquiring an IT system from a vendor, a
vendor selection process will help to guide you
1. Define
2.5.Identify
through this process using the following phases:

Vendor business
4.
6. Vendor
3. Contract
Request requirements 1.
2.
Define business requirements
Identify potential vendors

potential
selection & 3. Request for proposal

for
negotiation
proposal
4. Vendor demo’s

demo’s
IT system selection
Due Diligence
vendors
5.
6.
Vendor selection & Due Diligence
Contract negotiation

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1. define business requirements

• What do you want to achieve with the IT solution? How can you measure the effect? What problem would it
solve? Would it make X more efficient or will boost X your success as an organization?

• Which requirements should a vendor meet in addition to the business requirements?

• Limit the scope to avoid too complex systems that will solve all your problems (they wont)

• How is the system being implemented? Multiple days training = too complex system

• How is the product being maintained? Offsite support available? Updates for errors & security?

• How can tailored functionality be implemented? And what are the costs and timelines?
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2. identify potential vendors

• Broad investigation within the (domestic)market to determine which vendors can potentially meet the
desired business requirements

• Contact these potential vendors to get a better glimpse of their product and services, to see if this
vendor could be a potential candidate

• Strive to identify at least two vendors who want to create a request for proposal

• Think about who in your organization is able to assist in the process

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3. request for proposal
• Ask the identified vendors to create a proposal based on the defined business requirements

• Create a document that covers the following aspects, which a request for proposal should meet:
1. Project goals and scope of services
2. Time and place of submission of proposals
3. Minimal requirements and expected outcomes/results
4. Support & implementation help
5. Budget, conditions of payment, service levels, success acceptance criteria.

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4. vendor demo’s

• After having received the vendor proposals, review these proposals to identify the match with your
business requirements and potential gaps

• The identified vendors will get the opportunity to give product demo’s and explain their proposal

• Validate if these proposals cover all the business requirements and what could result in additional costs

• Discuss what the on-boarding looks like and what the preconditions are to implement this.

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5. vendor selection & due diligence

• After the demo’s, it is time to prioritise the vendors and their proposals based on their performance
throughout this process

• You should not scrap all proposals to keep just one, only decline the proposals who do not meet the
business requirements

• If the last proposals are selected, due diligence will have to be done to determine if business can be
done. For example: ask about references from other clients. How many clients do they already have and
what solutions are implemented? Is the vendor in a financial healthy situation? Is the vendor able to
deliver on promised solutions?

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6. contract negotiation

• The remaining vendors who successfully completed due diligence are eligible for contract negotiations.

• Negotiate the price and the potential gaps in the proposal to reach an interesting offer. Think about how
you are paying the vendor compared to what you will get delivered (in example: 50% before and 50%
after implementation, think critical about monthly user/member fees).

• Compare the different offers and pick the contact that would best suit your organization

• Sign the contract, re-evaluate the delivered solution periodically.

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Critical success factors
• Simplicity of the IT system is the key to success

• Who within the cooperative is going to work with the IT system and are they familiar with IT solutions / IT
packages?

• Short implementation time can be an ease-of-use indicator of an IT system that explains itself

• A cloud solution sounds nice, but how stable and fast is your internet connection?

• Make sure that remote support can be provided immediately by phone or internet

• Can the vendor build tailored functionality? What are the costs and timelines?

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