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Selecting and Managing IT Vendors
A 10-step guide for finding and working with vendors
June 2, 2008
This article was adapted from a chapter in Recipes for a 5-Star Library, a compilation of technology tips and techniques created by TechSoup's MaintainIT Project, an effort funded by the Bill & Melinda Gates Foundation to gather and distribute stories around maintaining and supporting public computers.
Unless you know how to build computers from scratch and write your own software, it's likely that you’ll have to talk with IT vendors sooner or later. Nonprofits have a lot of leverage when it comes to building and managing vendor relationships, but we don’t always know how to exercise our power. Getting the best service and the best price takes some thought and planning.
Below, we'll break down the process of working with vendors and recommend a few good articles for each step along the way. We’ve used fairly general language (“project,” “purchase,” “purchasing decision”) to describe this process because our advice applies to a wide variety of situations. You may be looking to buy a workstation, a printer, a suite of productivity software, or an operating system. On the other hand, you might be in the market for a consultant or a contractor to build a database or a Web site.
Why Pay Attention to Vendor Selection and Vendor Management?
- Sales representatives and account managers can be great allies for your organization. If they’re well-informed in general and willing to learn about your particular situation, they can provide excellent advice about how to spend your technology dollars.
- A company with good sales representatives and good support technicians will make your life much easier when a piece of equipment breaks.
- Sales reps and account managers can also direct you to the right training opportunities.
Key Actions to Consider:
- Is there any way you can join with other organizations similar to yours and buy in bulk?
- If you’re looking for a single document that describes the process of vendor selection from start to finish, we recommend this excellent guide from NPower. Should you move forward with this project in the first place? If so, how do you research vendors? How do you write a request for proposal (RFP)? How do you evaluate the responses to your RFP? Even if you don’t issue a formal RFP, this guide offers a great list of criteria you can use when comparing different technology vendors.
- Techsoup offers a similar overview of the process in the form of an RFP timeline.
10 Steps to Working Successfully with Vendors
| STEP | ACTION | TO LEARN MORE |
|---|---|---|
| 1 | Determine if this is the right time to make this purchase. | NPower's guide to Selecting the Right Technology Vendor offers five criteria for deciding if you’re ready for a particular technology project. See the section on “Assessing Feasibility.” |
| 2 | If the project involves considerable time and labor, decide if you should outsource it. In other words, do you really need a vendor…or should you keep the project in-house? | Summit Collaborative offers guidance for answering this question in its article Determining Whether to Outsource. |
| 3 | Figure out your organization’s needs. What are you trying to change in your organization by buying this product or service? What are the outcomes you’re trying to achieve? | The article can help you define your needs up front. If you create a formal requirements document (also known as a needs assessment) that defines your required and desired outcomes, you can use this as the basis of your RFP and your vendor evaluation matrix. |
| 4 | Determine if you should write an RFP. Call your finance department or funder and ask if there’s a policy on RFPs. Frequently, RFPs are required above a certain dollar amount (for example, for bids exceeding $5,000 or $10,000). | The article The RFP Process: An Overview explains the difference between an RFP (request for proposal), an RFI (request for information), and an RFQ (request for quotation), and provides guidelines to help you decide between a formal and an informal RFP process. |
| 5 | Become an RFP pro. | The articles Writing an RFP and The RFP: Writing One and Responding to One each provide helpful RFP checklists to get you started. Beyond the Template: Writing an RFP that Works offers additional advice on making your RFP stand out from the crowd. |
| 6 |
Research possible vendors. |
TechSoup's Nine Tips for Navigating the RFP Research Phase recommends places to turn to when you’re researching a vendor’s track record, while TechRepublic's Follow These Guides on the Road to a Valuable Vendor Relationship emphasizes the importance of checking a vendor’s references. |
| 7 | Develop vendor selection criteria. |
Idealware's article Vendors as Allies: How to Evaluate Viability, Service, and Commitment offers some great suggestions about the criteria you should apply when choosing a software vendor, especially when the software in question is large, complex, and mission-critical. NPower's Selecting the Right Technology Vendor (510 KB PDF) includes a thorough list of evaluation criteria in its appendix. |
| 8 | Negotiate and write the Contract. Work with your organization's individual or departmental expert in contract rules and regulations. Turn to them first so that you abide by the relevant laws and policies. However, for large, complex, important projects, make sure you and your colleagues are involved in drawing up the contract. |
TechSoup's Writing a Contract offers helpful guidelines on contract negotiation, while Casanet's Putting Agreements in Writing outlines the key elements of a written contract. It may be appropriate to put a service level agreement (SLA) into some contracts, which defines the performance level a provider is bound to. For more information, see HelpDesk Journal's Service Level Agreements Boot Camp, and Computerworld's SLA 101: What to Look for in a Service-Level Agreement. |
| 9 | Manage Your Vendor Relationships. You can’t just sign a contract and then ignore your vendor. | For tips on how to keep that relationship running smoothly, read Marc and Beth’s article on Techsoup. |
| 10 | Evaluate Your Vendor Relationships. Examine the market and your organization’s needs on a regular basis. The best vendor last year won’t necessarily be the best vendor this year. On the flip side, a long-term vendor relationship can pay off in service and perks. Also, a well-written contract often includes benchmarks that you can use later to evaluate the vendor performance. |
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About the Author:
Chris is a technology writer and tech analyst for TechSoup's MaintainIT Project, which aims to provide IT management guidance to libraries. His previous experience includes working at Washington State Library as a technology consultant and technology trainer, and at the Bill and Melinda Gates Foundation as a technology trainer and tech support analyst. He received his M.L.S. from the University of Michigan in 1997.
Copyright © 2008 CompuMentor. This work is published under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License.
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Hi Leila-- Welcome to TechSoup! Thanks for letting us know about your organization and your services. Sounds like you have some great expertise to offer, so I hope we'll see more of you around the forums. Please also have a look at our Commu...
Hi, I run Samasource, nonprofit organization that helps IT outsourcing companies in Africa and rural Asia find US clients to promote knowledge job creation in some of the poorest parts of the world. We have a network of very talented vendor...
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