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How to Choose a Vendor N-TEN DC Regional Conference October 23 rd , 2003 Agenda Introductions Why selecting IT support is hard How nonprofits get tech support When to look for outside help How to find the right vendors to approach The Proposal Process

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how to choose a vendor

How to Choose a Vendor

N-TEN DC Regional Conference

October 23rd, 2003

agenda
Agenda
  • Introductions
  • Why selecting IT support is hard
  • How nonprofits get tech support
  • When to look for outside help
  • How to find the right vendors to approach
  • The Proposal Process
    • Requirements through contract negotiations
  • Goal: understand how to make informed decisions when buying software and technical services

2

introductions lisa rau
Introductions – Lisa Rau
  • Confluence:
    • IT services firm providing support exclusively to the nonprofit sector
    • Over 110 nonprofit customers and ~25 staff since founding 3/2001
  • Lisa Rau:
    • CEO and cofounder
    • ~20 years of experience in the IT support services industry
    • Managed dozens of teams of contractors / vendors
    • Negotiate contracts for service

3

introductions lisa rau5
Introductions – Lisa Rau
  • Responded to hundreds of RFPs
    • Write around 2 proposals a week for nonprofits
  • As IT contractor to the Federal government, learned “best practices” in procurement
  • Frequent invited speaker on IT budgeting, fundraising for IT, and IT-related capacity building
  • VP on the Board of the YWCA NCA
  • Computer Scientist (BS, MS and Ph.D.)
  • Peer Reviewer, for MD Nonprofits’ Standards of Excellence Program

5

why selecting it support is hard
Why selecting IT support is hard
  • Complex, unfamiliar material
  • Benefits are hard to quantify
  • Costs often run well beyond estimates
  • The people explaining the choices are not always good at explaining
  • Extra due diligence to ensure you are getting the right stuff at the right price
  • Further exacerbating the situation:
    • Fewer economies of scale
    • Every tech dollar seems a dollar not spent on clients
    • Small capital budgets

6

when to look for outside help

When to Look for Outside Help

How do nonprofits get technical support?

how do nonprofits get technical support
How do nonprofits get technical support?
  • Accidental techie
    • Limited relief from “primary” job responsibilities
    • Self-taught
    • Limited authority to make policy
  • Lone consultant
    • Can appear to be less expensive if based on hourly rate
    • Cannot have breadth of skills
    • Limited backup for when occupied or not available
    • No quality assurance, best practices, methodologies, etc.
  • Circuit rider
    • Same as lone consultant
    • Often focused on specific purpose

8

how do nonprofits get tech support
How do nonprofits get tech support?
  • For-profit organizations
    • Best is exclusive / primary focus on nonprofit sector
    • Smaller ones w/nonprofit practice can work,
      • Commercial approaches are appropriate for the largest of nonprofits
  • Nonprofit providers
  • Special people for special projects
  • Pro-bono / Volunteers
    • High turnover and not necessarily there when you need them
    • Contractual relationship often overlooked
    • Same problem as lone consultants
  • In-house IT Departments
  • Other

9

when to look for outside help10
When to Look for Outside Help
  • Do you fix your own phone system, copier, or program your own accounting system?
  • Special expertise / Expertise not available in-house
    • Design and development of database or website
    • Selection and/or implementation of commercial software system
    • Networking, security, equipment selection
  • Outside is better than inside
    • Independent view – consultants are often “heard” more than internal staff
    • Staff tend to open up more to outsiders who guarantee privacy
    • Second opinion
    • Unbiased and fresh perspective

10

when to look for outside help11
When to Look for Outside Help
  • Extra Capacity / Initiative
    • A consultant will make sure things move along
  • Extra Hands
    • A special project may need temporary extra effort
    • Moving offices, major system upgrade over a weekend
  • Philosophy / Cost
    • Some organizations like to stay focused on their mission
      • Maintaining systems and the technology infrastructure is often not part of the mission
    • Paying a part-time expert is often more cost-effective than a staff member who dabbles

11

how to find the right vendors to approach
How to find the right vendors to approach
  • In the Greater DC Area, there are vendor listings at the:
    • Washington Council of Agencies
    • Maryland Association of Nonprofit Organizations
    • Washington Regional Association of Grantmakers (paid)
    • Technology Works for Good
  • www.techsoup.org
  • It was supposed to be coming soon – N-TEN Capacity Map
  • Exploit your network – ask your peers
  • Traditional Means:
    • Research (Internet, yellow pages, advertising in Chronicle of Philanthropy, etc.)
  • Post on listservs
    • Nonprofit-Tech-Jobs (mostly for staff)
    • DC Web Women
  • Disseminate

13

how to find the right vendors to approach14
How to find the right vendors to approach
  • Know whether:
    • The recommendation is given freely or with a hidden referral fee
    • Vendor / consultants had to pay for their listings
    • The sponsoring organization did any quality assurance on the listings / referrals
  • Time / Quality tradeoff
    • The more widely you disseminate your need, the more time it will take to choose but the better the end result

14

what if you already have a vendor you like
What if you already have a vendor you like?
  • For major or new projects (outside the existing working relationship):
    • Competition can only help your nonprofit. Why?
      • Forces you to think through your requirements enough to communicate them effectively
      • Can help provide leverage / negotiate with your current vendor
      • You may find a firm that is better suited to do the work at hand
  • Periodically re-compete your contract
    • Like you re-compete your audit firm
    • Ensures your vendor doesn’t “take you for granted”
    • Likely to get a break and/or find a better match
  • Sooner or later, you reach the limits of that

vendor’s abilities and/or experience

15

the procurement process17
The Procurement Process
  • Requirements Analysis
  • Request for Proposal
  • Questions and Answers
  • Down-Select to Finalists
  • Interviews
  • Selection
  • Negotiation
  • Project Implementation and Management

17

requirements analysis
Requirements Analysis
  • Figuring out what you want to do is often the hardest part
  • The broader the staff input (and potentially board’s) the better the end result
  • It is OK to state outcomes in functional, not technical terms
  • Write down the results of your analysis
    • Prioritize
  • Incorporate into RFP

18

requests for proposals
Requests for Proposals
  • The proposals you receive are a direct reflection of the RFP you issued
  • Provide:
    • The specific information you want from each vendor, in what order; how proposals should be submitted,
    • The evaluation criteria – it should be complete and measurable
      • What’s wrong with this: “Proposals will be evaluated on all appropriate criteria, including, but not limited to, cost, experience and support offered.”
    • Timetable and schedule
    • Don’t ask for information you don’t need or won’t evaluate
    • Process for Q&A
  • Costs should be clear and broken out

into tasks / subtasks

19

evaluation criteria
Evaluation Criteria
  • Components to weight:
    • Capabilities of specific individuals
    • Corporate Expertise – in this area
    • References and Prior Experience
    • Technical approach
    • Understanding of requirements
    • Cost
  • The quality of proposals is often an indication of the quality of the work
  • Work must be broken into phases with visible milestones
  • Evaluate credibility and reliability first

20

questions and answers
Questions and Answers
  • Do not let on who the other bidders are
    • Use “Bcc” if emailing all vendors at once
  • All questions should be submitted in writing by a certain date
  • All questions and all answers should be responded to in writing to all respondents
    • Ensures a level playing field

21

down select and interviews
Down-select and Interviews
  • After receiving the proposals
    • Now it is time for you to ask questions back – give the vendors one chance to “make it right”
      • CRs (Clarification Request) and DRs – (Deficiency Reports)
      • Price comparison requires apples to apples – low bid is as dangerous as high bid
    • Make a matrix with your evaluation criteria in it and score the responses
    • Get a committee together to make the decision
    • Consider bringing the vendor in for an in-person interview
      • CRs and DRs can be handled through this oral process –
      • Make sure the company knows what kind of people to bring
  • Often, the it is clear who the winner is –
    • the selection is obvious

22

hiring technical support best practices
Hiring Technical Support – Best Practices
  • The specific individuals assigned to do the work is the biggest contributor to project success
  • You get what you pay for
  • The “hourly rate” fallacy
    • But how MANY hours at WHICH rate? Is travel time included?
  • Past performance is the best predictor of future success
    • Check references – last 5, not their choice
    • Get resumes for the specific individuals who will be assigned
  • Look for the real thing – not someone who learned technology on the side
    • Academic degrees or technical training
    • 2+ years on-the-job, relevant work experience

23

negotiations
Negotiations
  • Don’t pass up the opportunity to negotiate
    • Terms of contract
    • Price and payment
  • Develop a web of relationships
    • Technician and organizational point of contact
    • Business managers
    • Executives
  • Contracts are there to protect your organization
    • Non-solicitation - Nondisclosure
    • Insurance - Payment / Billing
    • Arbitration
    • Intellectual property / ownership
    • Escrows
    • Lock-in future escalations

24

proposal manners
Proposal Manners
  • Don’t issue an RFP unless you intend to issue an award
  • Be sensitive to the time and effort of the vendor – they aren’t getting paid for this!
  • Always provide useful feedback to the vendor so they can do better / be more successful the next time

26

network desktop maintenance
Network / Desktop Maintenance
  • Don’t cut corners on wiring
    • The incremental cost of adding another drop are small compared to bringing the cabling guy back
    • Professional installations are appropriate for professional organizations
  • Backup, support, and reliability are more important than performance
    • Most nonprofits rarely tax their networks
  • No such thing as “set and forget” with a network – you need in-house skills
  • Don’t overbuy your server – most nonprofits need moderate performance

27

web development
Web development
  • This is a commodity now
    • Make the oversupply work for you
  • Websites are works in progress – don’t plan on a finished product
    • The associated internal business processes for maintenance are as important as the website itself
    • Putting responsibility in the communications department seems to work pretty well
  • Build only as much as you can keep updated
  • Think first about WHO will view your site, then about WHAT they will want to see
  • Plan review of site every 6 months

28

custom programming
Custom programming
  • These types of projects succeed or fail based on the quality of the up-front requirements analysis performed
    • Make sure to get a broad set of staff input up-front
  • If you didn’t get sticker shock, the price is probably too low
  • Budget 30% of development per year for updates and support
  • Stick with commonly used languages and applications
  • You’ll use 60% of what you ask for – buy only that
    • Pay special attention to any contract you enter into – protect your organization from exposure
    • Negotiate with the vendor

29

when you run into problems
When you run into problems
  • Don’t hesitate to surface problems early
    • Often, the firm doesn’t know there are problems – they aren’t mind readers!
    • The best performing vendor is one who thinks they are about to be fired
    • Suggest specific fixes – i.e., replace the assigned technician
  • The hardest decision to make is to cut your losses
  • If outcomes are not achieved you MUST ask whether to continue
  • Avoid blame and move on – proving fault is very difficult in IT

30

conclusions discussion questions
Conclusions / Discussion / Questions
  • Time and effort spent up-front will pay off down the road
  • Competition can only help
  • Proposals you receive are only as good as your requests

31

contact information
Contact Information

Lisa Rau

Confluence Corporation

202-296-4065 (office)

703-819-3067 (mobile)

lrau@confluencecorp.com

1111 19th Street, NW

Suite 900

Washington DC 20036

32