eCommerce technologies and solutions have become a fundamental business need across all industries. Approaching the task of finding the right company to partner with per your business requirements is a daunting task, usually solved by putting together an RFP. Yet the RFP ritual often comes up short when seeking answers to questions such as:
- How will the solution address the business requirements?
- How will the solution enable the desired customer experience?
- How will the solution meet the technology and integration objectives differently from other options?
Forrester Research has devised a better way to make these complex decisions. The approach is called scenario-based technology evaluation process (STEP) and it leads to a better fit between buyer and seller. Summary of STEP is below, click here to download the full study.
Problems With The Current eCommerce Selection Process
Today, the typical eCommerce technology selection process follows a well-worn path. That process places emphasis on the RFP as the primary selection tool. This traditional process fails at a very high rate because:
- Business stakeholders don’t know what to ask for.
- The RFP process is often the dumping ground for every possible requirement, collected from every possible corner of the business.
- The RFP exposes the “what” while hiding the “why” or “how well.”
- The RFP is devoid of context.
Updating The Process With Scenario-Based Technology Evaluation
At the core of this improved process is an emphasis on business needs and a requirement that the vendors under evaluation demonstrate how they address those needs. The approach requires businesses to define scenarios that represent key business needs and requires the vendors to demonstrate how their products serve those scenarios. In doing so, clients also recognize that long, burdensome lists of requirements become less critical to their selection process than the domain knowledge represented by the vendors and how they meet these needs with varying quality. Thus, key benefits of the process include:
- Specific knowledge of how well your goals and challenges are understood and supported.
- Key differences in the products that emerge more clearly.
- Clear explanation of how the capability is working with other clients.
- Insight into what is supported by base applications versus via customization.
- Valuable insight into the culture, people, and vision of the vendor.
Putting STEP In Context
STEP is a critical component in a larger technology selection process and must be placed inside that larger context. Generally, a well-run vendor selection process will have three key dimensions:
- Evaluating how the vendor supports business requirements.
- Evaluating how well the vendor will meet technology requirements.
- Evaluating the vendor’s stability, client satisfaction, and ability to meet legal requirements.
The RFP Is Dead; Long Live The RFI
While the RFP-driven process is very problematic, the RFP deliverable requested from vendors can be very useful. However, repositioning it as a request for information (RFI), and not a proposal, more properly aligns the document with being a contributor to the overall decision process. We recommend that clients use RFIs as a means to:
- Collect background information on the prospective vendors.
- Get the vendors on record for negotiation and accountability.
STEP: Running A Scenario-Based Technology Evaluation
A good scenario will require vendors to get into the mindset of a merchant and a marketer and showcase how their tools enable the business to succeed. By using a few core best practices and a basic process flow, running a STEP should be both easy and liberating for the project selection team. Forrester suggests that you focus on three to four well-developed scenarios, with back-office business process, customer experience, and operations capabilities woven into them. Future-facing requirements and opportunities can be included as bonus elements to ensure that you are inviting the vendor to demonstrate both leading capabilities and core ones. There are essentially three key phases of STEP:
1. Prepare. Lay the groundwork for STEP.
- Assemble and organize the vendor selection team.
- Ensure a clear and approved project charter, business case, and budget.
- Define high-level business, customer experience, and technical requirements.
- Know how you want to own and operate the technology.
- Determine your shortlist of three to four vendors to take through STEP.
- Field an RFI to obtain key information.
- Prepare to conduct technical evaluations if appropriate.
2. Evaluate. Set up scenarios for use in evaluations.
- Understand how your business works today.
- Set up real-world cases.
- Design scenarios around multiple business processes.
- List workflow steps and how you want the system to respond.
- Don’t stop with the base execution of the tasks.
- Determine scenario scoring criteria and weighting.
- Communicate these scenarios to the vendors in written form.
- Lay out clear ground rules for vendor presentations.
- Bring vendors in for lab demonstrations of scenario execution.
3. Decide. Conduct STEP.
- Score vendors based on their capabilities demonstrated through scenarios.
- Conduct reference, background, and analyst checks.
- Select your vendors for price and contract negotiation.
- If time allows, and depending on technology, validate through a proof of concept (POC).
- Finalize procurement process and contract negotiation.
- Prepare the transition to your project development process.
No matter the industry, give STEP a try to give prospective vendors the best opportunity to show you their stuff.
Naomi Catalina
Designer at Large
Resource: Findings from Forrester’s report Scenario-Based eCommerce Technology Evaluation Process.
You may be surprised that the answer is one. Well, maybe more than one but certainly far fewer than typically found in most organizations. In our experience, we find that many companies manage relationships with 20 and up to 100 vendors. Considering the hard and soft dollar costs associated with managing multiple vendors, organizations should clearly invest time in consolidating their purchases.
