Successful Outsourcing Vendor Selection Process – Part 1

November 23rd, 2010
Experts will tell you that the outsourcing vendor selection processes can be pretty complicated and also an emotional undertaking – that is, if you do not know how to approach it from the very beginning. Here are steps to help you select the right outsourcing vendor for your business. This guide will help you analyze your business needs, search for prospective vendors, pilot the team in choosing the winning vendor(s) and provide you with the knowledge on contract negotiations and effectively avoiding negotiation errors.

1. a. Examine the Business Requirements

Before you start the whole process of gathering data or performing interviews, you should first assemble a team of individuals who sure have a vested interest in this kind of vendor selection process. The very first task that the outsourcing vendor selection team will need to carry out is to clearly define (in written form) the material, service or product that you are looking for in an outsourcing vendor. Then, define the technical and the business needs as well. Also, you need to clearly define the vendor requirements. Lastly, you will also need to take time to publish your document to the aspects that are relevant to this outsourcing vendor selection process and also seek the team’s input. You should have the team evaluate the comments and create a final document.
Quick Summary:

1. Put together an evaluation team
2. Define the material, service or product
3. Define the business and technical needs
4. Define the vendor needs
5. Finally, publish a “requirements” document for the team for approval.

1. b. Outsourcing Vendor Search

Now that you and the team have an agreement on the business and outsourcing vendor requirements, the team must now begin to search for prospective vendors that will be able to deliver the product, service or material. The bigger the scope of the vendor selection process then the more vendors you should consider putting on the table. You need to understand that not all vendors will even meet the minimum requirements and the team will have to come to a decision of which vendors you will seek more information from. Then write a RFI (request for information) and immediately send it to the chosen vendors. Lastly, carefully evaluate their responses and pick a small number of promising outsourcing vendors that will be short listed and move on to the next step.
Quick Summary:

1. Put together a list of promising vendors
2. Pick vendors that you will request more information from
3. Write an RFI
4. Evaluate the responses of prospective vendors and create a short list of promising vendors

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