A quantitative decision matrix for increasing value for both buyers and sellers: THE APPROACH FOR VENDOR SELECTION

Background

The client’s segmentation project team consisted of a project sponsor, a team of three segmentation directors and a research director. However, as the organisation had not yet hired a research director, an external consultant specialising in research and segmentation was hired to augment the existing skills of the team and to provide guidance during the request for proposal and vendor selection stages.

Within a period of four weeks, the project team along with the consultant created a request for proposal that integrated the needs of the three specific segments and identified a short-list of four potential research vendors.

Chosen approach

During the time that the request for proposal was being developed, it was decided that the team needed a clear methodology to guide not only the selection of the research vendor, but also to communicate the project team’s expectations of the successful vendor. This methodology had to have consistency, fairness and collaborative input in order to guide the team accurately in the selection of a vendor based on a set of key criteria to ensure that the research would result in ‘actionable’ segmentation. Furthermore, it was important that all members of the team could critically evaluate each vendor based on a common understanding of their specific requirements and the specific criteria for vendor selection.

The chosen approach was to develop and utilise a quantitative vendor selection matrix (modified from Fred David’s [1997] text ‘Concepts of Strategic Management’) that each member could use to evaluate and rate the vendors based on a set of key criteria.

 

 

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