Vendor Selection and Monitoring

(OBJ 5.3)

Vendor Selection Process

• Similar to hiring a team member
• Due diligence
  • A rigorous evaluation that goes beyond surface-level credentials
  • Includes the following
    • Evaluating financial stability
    • Operational history
    • Client testimonials
    • On-the-ground practices to ensure cultural alignment
• Check for conflicts of interest that could bias the selection process
  • Conflict of Interest: Arises when personal or financial relationships could potentially cloud the judgment of individuals involved in vendor selection.
• Organizations should always strive to achieve transparency

Vendor Questionnaires

• Comprehensive documents that potential vendors fill out to offer insights into the operations, capabilities, and compliance
• Vendor questionnaires provide insights into operations, capabilities, and compliance
• Standardized criteria for fair and informed decision-making
• Might ask about:
  • Data Redundancy Measures
  • Security Protocols
  • Uptime Guarantees
  • Disaster Recovery Plans

Rules of Engagement

• Guidelines for interaction between organization and potential vendors
• Cover communication protocols, data sharing, and negotiation boundaries
• Ensure productive and compliant interactions
• Example:
  • Software firm: Rules might specify the confidentiality of a shared project details and the permissible depth of technical evaluation.
    • Such rules will ensure that the vendors interactions remain both productive and within the bounds.
  • If a company is looking for vendors or suppliers for a given project, an announcement will be posted or a request for proposal and that would be the only time they want to receive bids or proposals from a vendor. Otherwise they will just be dropped and move on.

Vendor Monitoring

• Overtime, businesses evolve, market dynamics shift, and vendors undergo changes

• Monitoring is the mechanism used to ensure that the chosen vendor still aligns with organizational needs and standards

• Performance reviews assess deliverables against agreed-upon standards and objectives

• Feedback loops

  • Involve a two-way communication channel where both the organization and the vendor share feedback
    • Client might provide input on the vendor's product quality
    • Vendor might propose improving the procurement process
  • Can lead to more collaborative growth and refinement

• The organization-vendor relationship requires continuous care, assessment, and adaptation