The vendor evaluation process

Dec. 5, 2003
It's more effective if you start with a high-quality RFP

It's no secret. The current track record for implementing computerized maintenance management systems or other sophisticated software packages is appalling. Consultants and industry experts may argue over how to define and quantify success, but there's clearly ample room for improvement.

One area where improvement is warranted is in evaluating vendor offerings based on user needs. All too often, packages are selected based on who delivers the most impressive sales pitch. As a result, CMMS sellers have invested heavily in perfecting their presentations. Although many large companies with significantly large maintenance budgets usually conduct a more-thorough evaluation process, they don't necessarily apply the same rigor on other fronts. For example, the bulk of process engineering work, which should drive the user specifications, is typically defined only after CMMS implementation, or even later. The usual reason is limited time or resources.

Most companies, big or small, can learn a few tricks from organizations that have conducted an effective vendor evaluation. To be successful, these companies have changed their evaluation process.

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Specs and engineering

Companies are taking a more proactive approach to evaluating CMMS options. Rather than jumping immediately to exploring software options, most of the initial energy is used in determining the specific user needs based on a rigorous examination of process change requirements. Users should take the time to identify what is important versus what is simply nice to have, and provide vendors with weightings for each specification criteria.

For large companies, a formal Request for Proposal (RFP) document is sent to an appropriate number of CMMS vendors. A typical Table of Contents for a formal RFP is shown in the sidebar. It's the Appendix that contains hundreds or even thousands of user criteria related to the vendor, its products and services.

Vendors are expected to respond to the RFP by stating whether each specification can be met, how, and at what cost. Users can then evaluate vendor responses based on a number of predetermined criteria. Scoring the vendor options leads to a short-list of one to three candidates. After conducting face-to-face detailed evaluations of the short-listed vendor and their packages, users select a winner.

For smaller companies, a formal RFP may be overkill. Vendors may be reluctant to respond because the profit margin on a smaller installation won't cover the cost of a proper response to the RFP. Because it's so expensive to buy and implement the "wrong" package, some users are willing to pay vendors to respond. Regardless of whether a formal RFP is issued, the specification document can still be used as a guide. For example, trial copies of the software can be evaluated against the requirements in the specification document.

Vendor demos

CMMS vendors are seeing a trend: prospective customers are testing software more meticulously during the final selection stage. Increasingly, prospects send short-listed CMMS vendors detailed test scripts before the demonstration, so that the software is evaluated with real data and relevant procedures. For example, test data and procedures can be compiled for entering sample equipment, suppliers, parts and trades; simulating the creation and completion of corrective work requests and purchase requisitions; and reporting on equipment and supplier history. Test scripts can be prepared when the specification is being written.

Cross-company effort

Ten years ago, selecting a CMMS package was considered the sole responsibility of either the information systems group or the maintenance department. Today, it's a family affair. The operations department, for example, has seen value in participating in developing performance standards, as they relate directly to the service level agreements with the maintenance department. The CMMS can be used to monitor asset condition, operating conditions and production levels as well.

Accounting and finance departments have an interest in CMMS specifications to ensure that viable interfaces exist to connect accounts payable, activity-based costing, project tracking, fixed-asset management and other modules. Purchasing and stores need to be involved with integrating the CMMS with purchasing and materials management modules. Engineering is concerned about change control on engineering drawings, project tracking and reliability engineering. Even the HR department needs to understand relevant features and functions for payroll, resource scheduling and skills inventory.

Each of these departments can help write the specification, prepare test scripts, attend demonstrations and site visits, and evaluate CMMS options. The greater their involvement, the greater the sense of ownership throughout the company, and, with it a greater likelihood of successful implementation.

Reference checking

In the past, companies may have asked vendors for a list of references. However, these references weren't pursued that aggressively, if at all. Over the years, buyers have discovered the importance of phoning and visiting reference sites for benchmarking. Much information about the strengths and weaknesses of the CMMS vendor and package can be gleaned at every level in the reference company. Reference checking is an opportunity to discuss critical success factors regarding implementation, managing the vendor relationship, ensuring proper process design to fit the package, and other plant-specific areas.

Attending the favored vendor's User's Conference is another evaluation input. It gives prospective buyers a chance to query a large number of users about problems they are experiencing with the vendor and its package. Additionally, the conferences provide a sense of the vendor's future, financial stability, product R & D, corporate culture and service delivery.

Vendor partnership

Forming supplier partnerships and strategic alliances has become a natural part of the vendor-selection process. Plants have realized they're not merely buying the CMMS package that best meets technical specifications, they're entering into a relationship that can add value over an extended period of time. This explains why companies are now interested in such services as Internet and telephone support, implementation, training, consulting and user groups.


Sample RFP Table of Contents

I. Introduction

A. Purpose

B. Confidentiality agreement

C. Overview of ABC Company Ltd.

D. Background of company/division products and services

E. The computer system project

II. General RFP requirements

A. Timetable for submission and evaluation

B. Vendor briefing

C. Questions concerning requirements

D. Proposal submission requirements

E. Evaluation criteria

F. Evaluation procedure

G. Additional terms and conditions

H. Response format

III. Technical environment

A. Current environment

B. System plans

IV. Business environment

A. Employee totals by functional area

B. Services business area

C. Application workload

V. Proposal content

A. Vendor company information

B. Product and hardware information

C. Technical information

D. Support services

E. Pricing

VI. Specification content

A. Overview

B. How to respond to the specifications

Contributing Editor David Berger can be reached at [email protected]

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