Gartner Decision Tools for Vendor Selection - …

1 Ralph WitcherGartner Decision Tools for Vendor SelectionThese materials can be reproduced only with Gartner s written approval. Such approvals must be requested via e-mail 1 Decision Tools forDecision Tools forVendor SelectionVendor Selectionis Gartner sis Gartner sdedicated ITdedicated ITvendor andvendor andproduct selectionproduct ,Createdin1995, Gartner s DecisionGartner s DecisionTools for VendorTools for VendorSelectionSelectioncovers technologycovers technologyselections in over 20selections in over 20IT s DecisionGartner s DecisionTools for VendorTools for VendorSelection helpsSelection helpsorganizations makeorganizations makebetter, faster andbetter.

2 Faster andmore cost-effectivemore Is It? Gartner helps end users make >5,000 Vendor selectionsDecision Tools for Vendor Selection A unique, dedicated service designed to help organizations make better,faster and more cost-effective decisions regarding IT product evaluation andselection, as well as to provide market intelligence for the vendorcommunity. Portfolio of approximately 25 software-based Decision Driver modelsWhere do we fit .. Gartner Decision Tools deliver software applications, services andmethodologies that enable users to calculate and compare return oninvestment (ROI), make better, faster, more cost effective Vendor selections,and perform cost-of-ownership analysis.

3 By understanding the ROI of technology investments, clients are equippedwith data to support their IT investment strategy. Decision Tools provide an ideal way to evaluate and select vendors andstrengthen negotiations. By understanding the total cost of ownership, organizations are able toreduce costs dramatically while improving operational 2 Why Decision Tools for Vendor Selection ? Enterprises that have replaced ad hoc acquisitionprograms with systematic acquisition programs havereduced procurement costs by 15 percent to 18 percent. Through 2004, a managed procurement process thatreflects an enterprise's organizational structure,business objectives and implementation capabilities willreduce time to implementation by at least 30 percent( probability).

4 Although a comprehensive request for proposal (RFP)costs a typical enterprise $100,000 to $150,000, an RFPwill reduce the TCO by at least 5 percent when $2million or more is involved ( probability).Page 3 Selection not a corecompetency Unrealistic timelines andexpectations Divided attention Uncertain scope Tactical instead ofstrategic focus Political agendas Identify appropriatedifferentiating criteria Structure criteria intoappropriate context Assign relativeimportance within thisstructure Gather and validateobjective vendorinformation Justify the selectionthroughout theorganizationTop Organizational Challenges:Top Project Team Challenges.

5 Can You Feel the Pain?Help!! Vendor Selection : Challenges IlluminatedWho can take advantage of this research? Any organization evaluating or purchasing covered technology areas Executives seeking to standardize on Vendor Selection methodologies Project teams faced with specific Vendor Selection initiativesPage 4 Time:3-to-15-month cycle time9 months average elapsed timeResources:8 to 20 persons on Decision teamCost: Selection costs 20% to 40% of dollarsspent$500,000 purchase cost $100,000to $200,000 selectionRisk:An inappropriate selectionPotential project failureNegative impact on businessprocessesChallenges.

6 Selecting the right Vendor is a daunting task involving athorny process that often results in destructive chaoswithinorganizations. To get it right!!Goal! Gartner Decision Tools for Vendor SelectionPage 5 Howshould I structure Vendor selections?What criteria should I consider?Howdo Iweigh each criterion?Where do I get the Vendor performance data?What?What?How?How?When?When? Gartner Provides the AnswersPage6 Enables better, faster and more cost-effective decisionsbyproviding a consistent Decision methodology thatencompasses key Selection criteria and objective analysison IT clients tosimulateplausible outcomeswith allvendors considered whilediscerning their unique trade-offsas their capabilities are mapped toyour enterprise TimeBuild ConsensusMakeBetter DecisionsValueThe Value PropositionClients save time and expense while reducing the risks associated withtechnologyselection.

7 What are the benefits of this service to an organization?Up to two-thirds less time spent based on our leverageable methodology. As much as 25 percent reduction in project team expenses Provides substantial negotiating leverage with vendors Decision Tools for Vendor Selection enables project teams to make better,faster and more cost-effective decisions through: The identification of a comprehensive set of differentiating criteria Provision of a best-practices structure and weighting of decisioncriteria Access to validated Vendor performance dataWhat are the benefits to an individual?

8 Gain credibility Project team members can establish a new level ofcredibility with their peers and superiors by introducing both time-testedmethodologies and best practices into their Vendor evaluations. They canleverage Gartner analysts to bring content expertise and wisdom to the table. Achieve collaboration Gain critically important internal collaborationnecessary to attain an optimal Decision . Minimize exposure Project team members don t have to bet their careerson a Vendor Selection process mired in Vendor hype, politics and thedisparate background of others on the Decision 7 Market data is derived fromthree distinct sources: Technology vendors.

9 Allvendors covered by Gartner sDecision Tools must completea detailed request forinformation (RFI). End-user turn to end usersexperienced with vendors andvendor products to tap intotheir wisdom about what theproducts can and cannot do. Gartner research andanalysis. All areas of theGartner analyst communityparticipate in collaborativeresearch that focuses onvendors strategic directionand (RHA) Draws upon Gartner sextensive experience withFortune 1000 companiesthat use the advice andguidance of Gartneranalysts to make strategicdecisions Being used bycommercial,governmental, military andnonprofit organizationsaround the worldInternalNeedsAssessment: Create project team Needs identification Mandatory Valued Nice to have Requirements definition Long list RFI/RFP issuedDetailed VendorAnalysis.

10 Evaluate responses Mandatory requirements analysis Short list Detailed Vendor analysis and RFP Scripted demos Select finalistsNegotiation andFinal Selection : Develop Ts and Cs Negotiating strategy Negotiate contract Select winner Place contractProcessMethodologyResearchMethod ologySelectionMethodologyCombines Gartner sResearchWith ..ResearchProcessMathThe GartnerMethodologyProcess MethodologyThe foundation of Gartner s Decision Tools approach to IT Vendor Selection : we refer to our formalized cradleto grave approach to Decision making as the Selection Methodology.