Vendor Assessment

The implementation of Corporate Performance Management software solution is the result of many months -- perhaps years -- of work, invovling many resources in the organization.  Most likely the decision was the result of a specific stragetic decision made by the organization, fullfilled by the successful execution of the program and project management methodoliges of the company.  The company can choose to either implement their own Corporate Management software solution, or choose from a number "off-the-shelf" software vendors in the Corporate Performance Management space. 

When an organization decides to look outside the company for it's solution, it must perform a vendor assessment to assess the ability of a potential vendor to meet commitments regarding the product/service. In doing so, there are typically 6 criteria that the company measures when choosing an external vendor:

1. Knowledge and Expertise - a common reason for using third-party vendors is that they can provide knowledge and expertise not available within the organization. In such cases, the business analyst should consider whether that expertise will need to be transferred and how capable the supplier is of performing that transfer. It may be desirable to target vendors with particular expertise in methodologies or technologies, with the goal of having that expertise transferred to people within the enterprise
2. Licensing and Pricing Models - in cases when a solution or solution component is purchased from or outsourced to an outside vendor, the licensing or pricing model will need to be taken into account. In many cases, solutions that offer similar functionality may differ greatly in their licensing models, requiring an analysis of different usage scenarios to determine which option will provide the best cost/benefit ratio under the scenarios likely to be encountered in the enterprise.
3. Product Reputation and Market Position - how many customers are currently using the product or service? Is the product widely accepted or used in similar organizations? Is there a regular update schedule and roadmap of features that are planned for delivery?
4. Terms and Conditions - are the services provided by the vendor to be temporary or permanent? The business analyst should investigate whether the vendor’s licensing terms and technology infrastructure are likely to present challenges if the organization later chooses to transition to another supplier. There may also be considerations regarding the vendor’s use of and responsibility for protecting the integrity of the organization’s confidential data. In addition, the terms under which customizations of the product should be considered.
5. Vendor reputation - the vendor’s experience with other customers may provide valuable information on how likely it is that they will be able to meet their contractual and non-contractual obligations. The vendor can also be evaluated for conformance and compliance with external relevant standards for quality, security, and professionalism.
6. Vendor Stability - how certain is it that the vendor will be able to provide the required services in the future? It may be necessary to request that steps be taken to ensure that there are no risks if the vendor encounters financial difficulties and that it will be possible to maintain and enhance the solution even if the vendor’s situation changes radically.

While vendor assessment can be a time consuming task for the organization, an effective vendor assessment reduces the risk of the organization developing a relationship with an unsuitable vendor and is likely to improve the successful implementation of the required solution.