Vendor Selection and Management
Technology vendor decisions have long-term consequences — the wrong vendor choice creates lock-in, drives up costs, and limits future options. A rigorous vendor selection process and active vendor management protect the organisation's interests throughout the vendor relationship.
Vendor Selection Process
- Requirements definition: Define functional requirements, non-functional requirements (scalability, security, compliance), integration requirements, and commercial constraints before evaluating vendors
- Market scan: Identify the relevant vendor landscape — analyst reports, community forums, peer network recommendations
- RFP/RFI: Issue a Request for Information or Proposal to shortlisted vendors. Evaluate against defined criteria.
- Proof of Concept: Test shortlisted vendors against real requirements — especially for complex or high-risk capabilities
- Reference checks: Speak with reference customers — not vendor-provided references but independently identified customers in similar situations
- Commercial negotiation: Negotiate pricing, contract terms, SLAs, data portability, and exit provisions
Contract Essentials
- Data portability and exit provisions — can you get your data out if you leave?
- SLA definitions and remedies — what happens if they don't meet their SLAs?
- Price protections — limits on price increases at renewal
- Security and compliance obligations — the vendor's responsibilities for data protection