- Having to get into significant discussions with vendors (yet)
- Gathering all your stakeholders together to prepare a detailed list of requirements
We’ll call this “the long list,” which might consist of 5-20 suppliers. We use this evaluation technique (which we’ll share more about on Monday) to ensure we’ve looked at the broad market of suppliers rather than just the few the buyer already knows.
The next step we follow helps us to get to a much smaller list, which we’ll call “the short list.”
For this, we do need to contact vendors (the long list) and we do need to prepare a list of requirements to add to the objectives and key workflows we’ve previously identified. The requirements won’t need to be detailed, but will still probably number into the 100s – some from our pick-list, others customised to each client’s needs.
Then we engage in what we refer to as an EOI (Expression of Interest) phase. Our EOIs are not just a generic market capability analysis like many buyers conduct. Ours seek indicative vendor compliance (to objectives and requirements) and indicative pricing based on the dimensions we supply. We’ve refined this model over the years to make it quite quick and (relatively) easy for vendors to respond to.
Using compliance to measure suitability and indicative pricing to plug in to our long-term TCO (Total Cost of Ownership) model, the long list usually becomes a clear short list of 1-5 very quickly.
Now we can get into detailed discussions with a very small number of best-fit suppliers without having wasted much time of buyer or seller.
More on the detailed discussions tomorrow!