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The Project Manager’s Guide to Vendor Selection

Project Manager's Guide to Vendor Selection

Most project managers shudder at the mention of a project that requires working closely with a vendor; I know I did. The effort and complexity of these projects are vastly underestimated because the naïve assumption is that, “the vendor will do all the work, right?”

About a quarter of the way through the project people realize that the project is a TON more work than they thought it would be, like:

  • Budget is getting decimated
  • Tasks are already behind schedule

Halfway through the project, nothing has gotten better, but your team thinks it’s all the vendor’s fault, and the negative spiral makes the rest of the project a miserable grind for all involved.

Choosing the right vendor is absolutely critical for a project manager who may be looking for a solution to meet your software or service-related needs. It isn’t just about the product or service; your vendor is bound to be involved in maintenance, repairs, and general communications regarding the delivery of your product. The right vendor is going to operate as a business partner, helping you every step of the way. The wrong vendor can become a major burden!

So, how do you select a vendor?

Begin by specifying what your project or organization seeks to gain through this new product or service. Your organization should have a clear outline of both its needs and its desires before you begin to compare different vendors.

When looking for a project management software solution, your organization could need:

  • Remote access to data
  • Persistent data storage
  • Easy file sharing
  • Consolidated reporting

The list of potential features is limitless, but once you’re aware of the key features you require, you can begin to look for suitable products that are going to meet these needs.  It’s important to pare down to what is really necessary; otherwise, you could end up with a solution that is both more expensive and more robust than you require.

When looking for software solutions, you will often need to find solutions that can be integrated into your existing software, or that can be customized to work with your internal applications. Some project management software, such as ProProfs Project makes it easier to customize them than others – all of these factors have to be considered in order to plan your project correctly.

Related Read: 5 Step Guide to Create a Perfect Project Plan

2. Demo the Available Products

Most products are available in the form of a demo copy, which will give you greater insights into whether the product will work for your organization. If possible, port a representative sample of your company’s data into the available products and test out your complete workflow. This will give you a better idea of how the system would be integrated into your company’s existing business processes.  

With good enterprise project management software, a representative of the company who provides the product may conduct an onsite demo or webinar for your project team.

During product demo, make sure that those who are going to be working with the products understand what they offer, or ideally, test them out. They are the ones who will notice issues with the product’s new workflow, or features that may be missing.  

Another important tip – always take detailed notes during or as close as possible to the demo.  Teams tend to think they’ll remember the nuances down the line, but after a few demos, they’ll miss out a few from the team’s collective memory.  Make your future analysis easy by getting it all down on a document to refer to later.

3. Assess Security and Regulatory Standards

A solution that is not properly secured is a ticking time bomb; it isn’t a question of whether it will become a problem but rather when. In addition to this, most businesses have internal and regulatory standards that they need to comply with, in terms of what data they keep and how their data is stored.

If your vendor can help with your security and regulatory compliance, this takes a significant burden off of your organization. At the bare minimum, you need a solution that is going to adhere to your organization’ own internal standards.  Get your security team involved early in the process so you don’t waste time assessing products that you’ll end up having to take out of the running due to a security concern.

4. Calculate the Total Ownership Cost

Nearly every solution has a budget attached. When dealing with vendor selection, there are two costs: the upfront cost to purchase the solution and the long-term cost of maintaining and updating it.

Software solutions are going to need to be patched and upgraded over time and continued support and development may cost more. Additionally, solutions generally have a substantial upfront cost, both in terms of the software licensing itself and any hardware upgrades or custom software coding that would be needed.

You will need to compare both the short-term and long-term costs of each vendor to make sure that they can be accommodated within your budget. A software solution may be affordable (or even free) to adopt but may cost a lot in maintenance and upgrades later on.

5. Check References and Reviews

At this stage, you should have a fairly good idea of which project management software is right for your project, and which solutions will be able to deliver what your company needs.

However, you aren’t done investigating the vendor providing the solution. You can begin by consulting online business references and reviews. Any vendor can promise to deliver; reviews and references will tell you whether they have delivered in the past.

Most companies have reviews available online; if the vendor you’re looking at does not, they may be a new, untested company. Every company is going to have some amount of negative reviews; what’s most important is how they deal with these reviews.

Look for companies that respond politely and professionally to inquiries, even if these inquiries are negative. For large or especially critical implementations, you may want to consider working with a research and advisory partner.

Choose a Simple Project Management Software to Manage Vendors Efficiently!

Finding a vendor is a time-consuming but important part of the process of a project, and you need to find a vendor that offers affordable project management software for your organization.

Not only do you need software that works as desired, but you also need software that is going to be well-maintained – software that can grow and scale with your business. By using the above tactics, you should be able to find a reliable vendor with a robust solution.

Further, choosing a simple project management software, such as ProProfs Project, can really help in managing all vendors efficiently and streamline workflow.

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About the author

David is a Project Management expert. He has been published in elearningindustry.com, simpleprogrammer.com. As a project planning and execution expert at ProProfs, he has offered a unique outlook on improving workflows and team efficiency. Connect with David for more engaging conversations on Twitter, LinkedIn, and Facebook.