Choosing to work with an external procurement vendor is much like any other partnership and requires the same level of thoughtful evaluation. Proper procurement vendor assessment and selection is crucial to building the foundation for your business growth, mitigate risk, and unlock opportunities. Insufficient evaluation leads to operational failure and strained relationships, all adversely impacting the business.
Particularly during the COVID-19 pandemic where in-person meeting and relationship building is much more complex, procurement vendor evaluation becomes more challenging yet more important than ever.
To support your procurement and finance teams, we put together this list of 5 best practices for procurement vendor evaluation:
Explore free or discounted trials. Ask procurement vendors if they allow you to try before you buy. Doing so significantly de-risks your purchase. Oftentimes, the 1-pager for a platform may look fantastic, but the actual product experience may have unforeseen but crucial flaws. Be wary of platforms that try to lock you into a massive, long term contract at the outset. Even if a free or discounted trial is not offered on their website or explicitly by the sales team, inquire about it and advocate for it anyways; the vendor may be able to work out a bespoke trial.
Ask for reference checks. Companies will frequently list testimonials on their website or otherwise reference the praise that their customers have given them. While these quotes can be used as data points, they are oftentimes cherry picked or even airbrushed by the vendor. Ask the vendor for introductions to multiple existing customers, especially ones who are similar to you in profile (size, structure, industry, needs, and use cases) and ask thoughtful questions during these existing customer conversations that elicit more constructive feedback, such as what the biggest downside or the biggest challenge of using the procurement vendor has been.
Understand the integrations. Many times, the true power of procurement technologies lies in their integrations. Procurement platforms are meant to increase your efficiency and save hours of valuable time. These results are largely achieved through powerful integrations that reduce or eliminate manual work in tasks like record keeping. However, if the integrations the company offers are not aligned with your existing systems, these benefits cannot be reaped. Clearly understand the integrations the vendor offers, the integration setup process, and what the workflows look like with these integrations to better assess the value add of the platform.
Diligence on their compliance capabilities. A major priority of procurement and finance teams is ensuring compliance and mitigating risk. Ask probing questions to understand the compliance practices of the procurement vendor and how they streamline your own compliance processes. Ask for external proof points, such as news features, certifications from accrediting agencies, and customer impact data points.
Understand their customer support experience. Different procurement vendor platforms have very different customer support experiences. The availability and quality of customer support is a less thought of but crucial part of the procurement vendor offering. Ask for specifics around response time, type of help, customer rating of the support service, whether a dedicated account manager or other point person is assigned, and availability throughout the day and across different time zones.
Apply these tips to your next procurement vendor evaluation process to better drive business growth, mitigate risk, and unlock opportunities for effective partnership.