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Vendor Assessment

Technique: Vendor Assessment

Vendor Assessment is defined as the evaluation or assessment of a potential vendor to establish if they can successfully meet the obligations and needs of the business regarding a product or service.

Role of a BA in Vendor Assessment?

A Business Analyst is required to support the business with selection and vendor assessment. Few activities that a BA may be involved in:

  1. Contributing in a vendor’s proof of concept or assisting with the 1st bid-or-buy resolution.
  2. Preparation of RFI (Request For Information) and RFP (Request for Proposal) packages

A Business Analyst needs to have the essential knowledge and capabilities necessary for understanding & assessing vendor markets in order to help the business in recognising the suppliers to invite for evaluation reasons.

A BA is required to implement decision analysis tools to aid the organisation in selecting the best solutions.

Vendor Assessment is considered as a time-consuming activity particularly when gathering evidence on multiple vendors. The guidelines used for assessing a supplier has been largely controlled by price. However, there are other various factors that need to be considered and these may include :

  • Financial stability,
  • Technical competence,
  • Cultural compatibility,
  • Knowledge base,
  • Motivation,
  • Capability and
  • The Vision of the vendor.

Thus, the attention on price as the major criterion is invalid.

Organisations should not reflect the ideology “cheapest is best”, when running vendor assessments. Essentially, a company should differentiate commercial evaluation from the technical in order to get the best of both worlds. The technical & commercial evaluations can thereafter be brought together to reach at an informed decision. This indicates that these two methods apply due diligence in measuring the prospective vendor with regards to:

  • Resource capacity
  • Availability
  • Availability of local support
  • Technical capability
  • Financial security
  • Client testimony
  • Experience in the sector
  • Understanding of business drivers and client’s business
  • Specific staffing and skill levels &
  • Compliance with standards
  • Understanding of business drivers and client’s business
  • Understanding of the geographic location

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