Selecting vendors to provide hardware, software, or services is a common and important task for IT management. It is good practice to delegate qualified individuals to carry out the evaluation of potential vendors and make recommendations. However, IT management must ensure the criteria used to make a vendor choice align with organizational objectives and do not reflect the personal preferences of the evaluator.


Assigning the Selection Task
Contracts or purchase orders usually require the approval of senior IT management and, in some cases, senior enterprise management or the Board. For commodity-type purchases, vendor selection is often done by the purchasing department. However, the identification of a list of potential suppliers and the selection of the preferred vendor is typically carried out lower down in the enterprise.

The group that will be responsible for getting value from the vendor relationship should be significantly involved in vendor selection. The manager or supervisor of the group is the one most impacted by the quality of the choice. The technical staff is well positioned to ensure that the selected vendor and product can do the job. For example, the selection of a vendor to custom develop an application should involve the application team. The selection of a contractor to wire a new office should involve the group responsible for the Local Area Network and the telephone system, as well as facilities.


Managing Personal Bias
There are a number of factors, however, that can inappropriately influence a recommendation:
" Good history with a vendor. When someone is familiar with a specific vendor, and has a good relationship with them, that person tends to recommend staying with that vendor. If the relationship is good for the enterprise, staying with an incumbent may be appropriate when there are no superior alternatives. However, if a personal relationship drives loyalty, if there has been no recent verification of the vendor's competitiveness on price and capability, or if the size of the expenditure is high, the incumbent should be included for consideration but not be handed the deal. If the purchase value is not too high, management seldom looks at it, and before you know it, there are a large number of this vendor's widgets installed.

" Brand dependence. It's easier to sell a recommendation for a recognized vendor than for a small unfamiliar name. Some vendors deserve their good reputation. Servers, storage, and laptops from familiar names are the right choice for most enterprises. In many cases, however, smaller players do as good a job for less money. And less familiar vendors often pay more attention and adapt their products better to small and mid-sized customers. Vendors with familiar brand names may be more interested in Fortune 500 customers.

" Risk avoidance. Most IT managers and staff will make a recommendation that minimizes risk. Vendors who take traditional approaches, and use familiar processes and technologies will generally be recommended even though alternative vendors may be more innovative or less expensive.

" Telling management what it wants to hear. Some management and technical staff like to avoid conflict and want to endear themselves to their bosses, or they want to ensure that a proposal will get approved, regardless of the vendor. If they have a sense of which vendor senior management likes, they may bias the evaluation to that management preference. Management, therefore, should hide their biases, unless, of course, the staff evaluation process is a sham.

" Getting it over with. The search for potential vendors in itself can be a time-consuming and difficult task. The subordinate likely views this as less important or less critical than his or her other responsibilities. Some evaluators give up the search after they have collected the minimum number of vendor candidates their boss requested. Others simplify the selection process to minimize their personal time investment. In both cases, there may be a better choice than the recommended vendor.

Management, while delegating vendor evaluation and recommendation, must recognize the potential biases of its evaluation teams, and address them before evaluation work is assigned.


Documentation Is Essential
IT Management must evaluate all major recommendations before approving them or taking them to senior management for approval. The availability of written documentation by the assessors is a key tool for management. The discipline of documenting the assessment process helps assessors to plan their approach more thoroughly and to reach their conclusions after rigorous consideration. The quality of the documentation, therefore, is strongly correlated with the quality of the recommendation.


The Risks of Abdicating a Decision
Management often delegates the identification, evaluation, and selection of vendors because managers don't have time, or most likely, they don't have the expertise to carry out the search themselves. In either of these cases, the delegating manager will be tempted to accept the recommendations of his or her team with only superficial review. This approach works in several situations. If the decision is low risk or low impact, management review may not be required. If the assessment team has previously successfully assessed vendors in a similar situation, management can go forward with their recommendation. But in all other situations, management should review the criteria, process, and evaluation documentation before proceeding.


Support the Recommendation Consistently
For significant vendor contracts, final approvals are given only after review by several levels of management. There may be preferences and biases at various levels. A frequent factor in preferring a specific vendor is that it has an existing business relationship with the enterprise. If an IT manager has enlisted his or her staff in the evaluation of vendors, and has taken their recommendation forward, it is important that the manager consistently supports that vendor choice. Support in adversity strengthens staff loyalty and commitment to their manager. Capitulation to external influences weakens the manager's credibility as an influential decision maker or influencer within the team. If there is going to be senior management interference, recognize it and deal with it early. The boss often wins, so pick your battles carefully.


Recommendations
Senior IT Managers should follow the following process to improve the quality of vendor selections:

1. Make the manager who will manage the vendor relationship accountable for making a recommendation. Managers should influence vendor and product decisions that affect them. They will pay attention to the quality of the recommendation, as they will have to live with it.

2. Establish appropriate selection criteria in advance. To avoid conflicts between individual and enterprise objectives, get agreement before the detailed evaluation begins.

3. Insist on a documented recommendation. The documentation of assessment and recommendations improves their quality, and simplifies management and purchasing review.

4. Review recommendations and be prepared to turn them down. Do not rubber-stamp recommendations. Assess the evidence to ensure that the recommendation is based on a thorough evaluation in line with the agreed criteria.

5. Endorse and support good recommendations. Support recommendations that are made in line with agreed upon criteria and that are based on a professional assessment.


Bottom Line
IT leaders should involve responsible managers and knowledgeable technical staff in vendor selection. However, the criteria actually used by those individuals may lead to a recommendation that is not the best for IT or the organization as a whole. Before automatically endorsing a recommendation, ensure that it aligns with the organization's requirements.