Searching for a suitable technological solution and trusted vendor can be challenging. Searches are initiated to enable capabilities, replace outdated technology, and invariably occur when an asset management firm decides to undertake a change in strategic direction. Complicating the search process is the fact that new vendors are entering the marketplace with regularity, making it difficult to track and effectively assess capabilities beyond traditional market leaders.
Understanding the implications of an evolving asset management organization while attempting to align with a growing tech marketplace is like trying to hit a moving target while standing on a rotating platform (please don’t try this at home). So, before you begin your next evaluation and selection effort, consider these steps to help guide you toward making the right vendor choice.
Step 1—Who are we?
Start with conducting an in-depth, introspective, firm-wide analysis. Each firm should consider the following prior to embarking on any search:
Strategic direction and current requirements necessary to persist
Development capabilities of the firm and capacity or willingness to supplement the vendor
Expectations of clients (internal and external)
This analysis will drive the development of a thoughtful and thorough request for proposal (RFP) questionnaire and help to ensure alignment of all stakeholders.
Step 2—Who are they?
Identifying the list of appropriate vendors for consideration can be complicated. You could start by Googling to seed a vendor list or engage a partner with a dedicated vendor relationship management function (such as Citisoft), which will get you there faster and mitigate the need for upfront due diligence.
Avoid building a vendor list based solely on input from current management and staff as this will skew results toward a smaller sample size, potentially eliminating viable candidates.
The short list of vendors will most likely be determined through RFP scoring and should be as identifiable as lead riders relative to the peloton (Tour de France is on my mind). The top quantitative scores, along with a qualitative review by key decision makers, will help establish the short list.
Step 3—How do we decide?
One tip to evaluate a short list is to employ confidence factors when scoring RFP responses. The goal is to determine the likelihood that stated requirements would be met fully and currently through native functionality. If not met, then a determination of whether success is feasible through workarounds or future enhancements must be made. This process can help differentiate amongst multiple affirmative responses.
Next, drive vendor demonstrations. Avoid the ‘dog and pony show’ for an effective use of time and resources. Forewarn vendors of the targeted approach and prepare multiple use-case scenarios to facilitate.
Lastly, don’t overlook cultural compatibility with vendors throughout the selection process. In previous searches I’ve conducted (as both a manager and consultant) there was typically a realization that deficiencies can be overcome with a productive relationship and vendor willingness to acknowledge gaps and deliver solutions.
Firms must invest significant time, effort, and resources when conducting a successful vendor search. An additional item to consider as you undertake a search is that contracts in this space are typically 5–7 years in length. Therefore, choosing the wrong solution will become both lengthy and costly. So remember, your ultimate vendor evaluation and selection goal is to choose well—not often.