Selecting a vendor can be tricky. Your new CIO may have their personal preferred vendor list, the CFO is sweating the added expense, and the department director needs all the work to be done externally because internal resources are fully committed to existing projects. Everyone has their own agenda.
Vendor selections bring out the worst politics in them all. They could be opportunities for various departments to work together and come up with a cohesive solution. Too often though, they result in someone’s agenda getting pushed forward and the staff having to pick up the slack.
The larger the organization, the larger the burden and expenses are associated in selecting a vendor. The true hidden cost of making a decision is buried in the administrative overhead of meetings, delays, legal reviews, and the touch points of every step in the process. Scheduling of conference rooms, delay of real work to attend meetings and of course the hundreds of emails that all require reading or a response from you. Add to this the delays in waiting for someone to sign off on each step, and the cost of all these resources starts to pile up. So how do you revamp the cost of making decisions if you are in a large organization?
Politics dictate who makes the decisions. Nobody wants to be left out because that means they are no longer in control or have power. This is just human nature. Yet, the management sections of libraries are full of books with examples of how executive decisions consistently fail because they don’t empower the employees that actually perform the work. The typical strategic planning retreat will involve the executive team setting requirements for new systems and success factors of the project. At the end of the project there is a big celebration because they met their own criteria and maybe end up with a bonus. This of course is occurring while the 20 year old front desk clerk is trying to register a patient and it is now taking four mouse clicks to do what it used to take one, and the patients have to wait longer to receive service. This results in the management epiphany; "Wow, we must be doing something right, because our waiting area is getting full. Time to build a bigger waiting area and hire more staff."
When hiring a software or service provider there are some legitimate concerns:
- Contract review by legal to eliminate clauses that are against local or state regulations.
- Information technology review to determine supportability of the new software or system with the existing resources.
- Finance review for payment schedules and milestone performance or non-performance penalties.
All too often I see a vendor do a pitch in front of a packed conference room. This is normally the third or forth time they are hearing a variation on the requested service or product. Someone asks, “Why should we go with your product/service when we had a vendor tell us that they can do it cheaper?” This tells me one thing; the primary stakeholder responsible for this project failed to provide a criteria, checklist and report card to the people conducting the vendor demos. Because if pricing was an issue, why not just bid it out? Go with the lowest bidder and be done with it. Instead you just gave the illusion that many in that conference room were empowered to make a decision. I have no doubt that you personally can save money driving a cheaper and less expensive car. But you choose to drive the one that you have because of certain criteria.
The most successful decision makers realize that they don’t have all the information to make an informed/low-risk decision. They surround themselves with bright people and provide them a vision. That team then can build ad-hoc groups that are responsible for developing the criteria and requirements of a particular service or product. It is then up to the management team to execute on and stay true to that criteria and requirements. Anything short of that process is just a political show that people go to watch. If you are facilitating these types of meetings, please provide popcorn.
