Solution Evaluation


Review Vendor Details

Understand if the Vendor is potentially viable as a business partner
  • Response to RFI/RFP/RFQ/RFT
    1. Review the information in the response to your RFI/RFP/RFQ/RFT.
    2. Question the Vendor on areas where the response is not clear.
    3. Request a draft contract.
    4. Review details and discuss any controversial findings with the company.
  • A degree of confidence in the potential viability of the Vendor

Rather than suspend the project while the Vendor prepares a demonstration, the time can be utilised to do an investigation on the Vendor's financial viability. You will have to make a decision about whether you focus on one Vendor or on all remaining vendors. If you strongly believe, that one Vendor is well in front, you might focus your efforts on that person. On the other hand if a number of Vendors are close, you can look at all Vendors.

What you are trying to establish are the following:

  • Is the Vendor going to be around in the long term?
  • Is the solution going to evolve, or will it stagnate and become out of date in a few years?
  • Can we continue to get local support, or will the Vendor contract their operations and we will only deal with a head office in another state of country?
  • Can the source be held in escrow in case the Vendor fails? Escrow is where a third party holds the source code and releases it to the client should the Vendor's business fail. At least you have the source and can fix or modify the application in the future.

A considerable amount of financial information is available in a public company. Tracking share price and looking for movements, then investigating why those movements occurred is a good technique. Reviewing annual reports can provide information. If the purchase is significant, a company specialising in reviewing financial organisations may be utilised.

The percentage of turnover invested in R&D is a good measure of the likely evolution of the solution. You can also check the frequency with which upgrades have been released. The nature of those upgrades is also important. Were they new features, or bug fixes? If predominantly bug fixes, how stable is the current software?

Searches of articles about the company can also uncover interesting information. For example, are they the current target of a takeover and what will this do to your relationship with the Vendor? What are staff turnover rates like for the company? Sometimes and exodus of top executives signals the company is going downhill. Who has recently joined the company in a senior role and what is their track record in other companies.

If you have a contracts or legal department, have them review the draft contract. It will throw up any contentious issues that might be in the contract so that they can be resolved early rather than at the end of the selection process. Reviewing the draft will also speed up the review of the final contract.


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