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Contrary to many beliefs that there is a simple criterion such as price for making a vendor selection, there are many effective ways to select your desired product or service. Here are some selection guidelines to consider:
- Performance/milestones – Many grants and contracts are structured such that a contracting company is required to meet certain “specific performance” or key performance indicators within certain dates and milestones. Often compensation and incentives are contingent on performance.
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- Design – When you are building a house for example, you will likely seek consult form various professionals such as architects, structural engineers and sub-contractors. You might engage more than one architect to create renderings based on your home design ideas.
- Quality – Quality may be judged on many factors. Often the selection is lengthy based on industry research, product type, references, components, quality specifications, process control and more.
- Track record – What has the contracting company and its staff managed to accomplish for other customers within its industry or for its community?
- Standard of measure such as defect rate and certification – Manufacturers are often contracted to meet certain standards of measure so that the product may be marketed in multiple countries.
- Request for Proposal (RFP) – Often the project is so complex that it requires proposals from bidding contractors. Company officials may use RFPs to judge the contractor's ability to think of all the angles.
- Crowdsourcing - Many Freelance Professionals may be engaged to create the product from conception to market acceptance.
- Merger Management - Corporate governance may outsource to fill gaps in service, staff or product feature set. Typically, the company has conducted gap analysis as part of the due diligence before diving into the merger, VAR or partner agreement.
- Return on Investment – ROI has been a highly used acronym that is difficult to measure such as conversions (sales) per click rate; however it boils down to the benefits received for the investment.
- Customer service – Given that several vendors may offer the same type of service, who will execute the best customer support? Service is often tied to product lifecycle specifications or service level agreements.
- Threshold measurement - Business intelligence tools such as dashboards, are an effective way for managers to keep track of ongoing product and business performance. These measures can be tied to profit margins, product acceptance measures and performance based incentives for employees and contractors.
- Environmental concerns - How will the contracting company reduce any negative impacts to the environment?
- Project Management - How well has the General Contractor met budget and other resource constraints for similar projects? How will contractors mitigate risks? How will they meet your project guidelines?
- Price – Price is often used as a deciding factor. The key is not to compare apples to oranges. Keep your product and service specifications in mind.
What is your selection criterion? How have you successfully chosen vendors or won business as a bidding contractor?
[Image courtesy of Digital Art, FreeDigitalPhotos.net]
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