The 7-Step Guide to Selecting the Right Vendor for Your Business
What to do when you land on "buy" in a "build vs. buy" scenario
There are many rubrics and frameworks out there for determining if you should “build or buy” software to accelerate your business, but there is not a lot out there if you decide to “buy”. What factors should you consider aside from the core feature alignment? How do you de-risk the selection as much as possible? Selecting the right vendor in a “buy” scenario is a critical task, as it directly impacts the success of your overall product and business. With countless options available, it can be challenging to know which vendor best meets your needs. In this guide, we will explore seven key factors to consider when evaluating potential vendors, helping you make an informed decision that sets your business up for success.
1) Feature alignment: Does the vendor's offering meet your needs?
Before diving into a partnership with a vendor, it's essential to assess whether their product or service aligns with your specific requirements. Take the time to create a comprehensive list of features and capabilities your business needs, and then compare it with what the vendor has to offer. This will help you determine if their solution is the right fit for your organization. This is the first and most obvious step to selecting a vendor.
2) Integration assessment: Can you integrate with the vendor's offering the way you want to?
Integration plays a critical role in ensuring a smooth and seamless experience for your business. Examine the vendor's integration capabilities and evaluate whether their solution can be easily integrated with your existing systems and processes. If they have public API docs, have an Engineering lead look at them. If they don’t, ask for them. This will help you avoid potential roadblocks and ensure the solution adds value to your operations. You are trying to initially assess if the integration is possible. If multiple vendors meet that requirement you can move onto determining which vendor it is easiest to integrate with.
3) Roadmap alignment: Is the vendor's future direction consistent with your business goals?
It's crucial to consider the vendor's long-term vision and how it aligns with your company's goals. By understanding their product roadmap and future plans, you can ensure that their offerings will continue to meet your needs as your business evolves. This alignment helps to foster a long-lasting and productive relationship with the vendor.
4) Industry expertise: Is a category-specific or general solution best for your business?
The nuances of your industry may dictate whether you need a category-specific solution or a more general one. Evaluate the vendor's experience and expertise within your industry, and consider whether their solution is tailored to address the unique challenges and opportunities you face. If you are operating in a highly regulated market, e.g. Healthcare, you likely need a category-specific solution. This can help ensure that the vendor's offering will deliver the best possible results for your business.
5) Costs: Dollars matter
While cost should not be the only factor in selecting a vendor, it is undoubtedly an important consideration. Assess the vendor's pricing structure and weigh it against the value their offering will bring to your business. Keep in mind that the cheapest option may not always be the best, and it's crucial to strike a balance between cost and quality. Collect the costs/pricing of the set of vendors you are evaluating as you can use this information in negotiations to see if you can get the best deal for the vendor that meets the rest of the criteria.
6) Support & SLAs: Preparing for the unexpected
Things don't always go as planned, so it's essential to evaluate the vendor's support and service level agreements (SLAs). This will give you an understanding of their commitment to resolving issues and ensuring your business can continue to operate smoothly. Be sure to clarify the support channels available and the response times you can expect as some vendors have slack-channel integrations to make filing tickets as easy as possible.
7) Business risk: Assessing the vendor's stability
Lastly, consider the business risk associated with partnering with a specific vendor. This includes evaluating the vendor's financial stability, market presence, and commitment to their product or service offering. While it is easy to worry about the small startup going out of business, you also need to worry about the large company exiting a line of business. By understanding these factors, you can gauge the likelihood of the vendor's business continuity and the potential impact on your own operations.
In conclusion, selecting the right vendor is a crucial decision that can greatly impact your business's success. By carefully considering feature alignment, integration capabilities, roadmap alignment, industry expertise, costs, support, and business risk, you can confidently choose a vendor that will help your business thrive. Remember, investing time and effort in selecting the right vendor will pay off in the long run, setting your business up for continued growth and success.