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Vendor Evaluation: Selecting for Success. Dana McCormick Wells Fargo Home Mortgage Delivery Services Baltimore PCC Education Seminar April 27, 2007. Objective.

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vendor evaluation selecting for success
Vendor Evaluation:Selecting for Success

Dana McCormick

Wells Fargo Home Mortgage

Delivery Services

Baltimore PCC

Education Seminar

April 27, 2007


Develop a methodology to objectively evaluate service providers or products, ensuring that the best one is selected for a given situation. The intent is to consider all relevant factors and minimize the subjective issues that can potentially influence such a decision.

vendor definition
Vendor Definition

A third party that performs functions on your company’s behalf or provides services to your company.

Some examples include:

  • Core Processing
  • Information and Transaction Processing
  • Security Monitoring
  • System Development and Maintenance
  • Print and Reprographics
  • Strategic Alliances
  • Internet Services
the process
The Process

Have a plan. Stick to the plan.

  • Identify your business requirements
  • Perform a due diligence via RFP, RFI, etc.
  • Evaluate the responses of each provider
  • Select a vendor
develop the plan
Develop the Plan

What are the drivers for use of a third party vendor?

Factors to consider

  • Cost reduction
  • Improved quality/performance
  • Increased flexibility
  • Speeding project delivery
  • Gaining access to expertise not available internally
  • Providing increased availability of services
business requirements
Business Requirements

Can the vendor provide the desired results?

Services/products provided by the vendor.

  • Core product or service
  • Service level agreement
  • Reporting
  • Transition and integration
  • Fee/cost
  • Contract requirements
  • Technology/security
  • Required vendor characteristics (minority ownership, certifications, local vs. national, etc.)
risk assessment
Risk Assessment

Risk conditions include:

  • Financial impact
  • Legal or regulatory compliance
  • Confidentiality
  • Vendor connectivity to client networks
  • Direct customer interaction
  • Vendor mitigation of personnel changes
  • Internal operations analysis
the proposal
The Proposal


  • Identify critical success factors
  • Identify barriers to success
  • Integration of vendor activities with corporate business strategy
  • Legal framework of an agreement
  • Ease of migration
evaluation criteria
Evaluation Criteria
  • Ability to provide the product or service
  • Ability to meet service level requirements
  • Integration plan
  • Ability to meet information security and disaster recovery expectations
  • Control environment
  • Risk assessments
  • Agreement to our contract
due diligence
Due Diligence

Components of due diligence include:

  • RFP/RFI development and issuance
  • Introduction and overview of desired objectives
  • Definition of business requirements
  • Definition of contract requirements
  • Request for information needed to conduct due diligence addressing the evaluation requirements.
  • Objective: Develop a procedure to select the best service provider from a group of qualified vendors; making a decision in a fair and objective manner.
  • Method:Develop and utilize a weighted matrix format as a tool to fairly and objectively evaluate the options available.
the process in action

Postage Run Rate



Compatibility with Operations



The Process in Action

What are the business requirements for selecting a presort vendor?

the process in action1
The Process in Action

Meet the needs in the proposal.

  • Does your company agree to our strict confidentiality agreements?
  • These are our security requirements. What will your company do to meet or exceed these standards?
  • Does your organization have any certifications or industry leading practices.
  • These are our service standards. What will your company do to meet or exceed these expectations?
  • What is the overall price structure, including postage run rate for our mail?
single function matrix
Single Function Matrix

Above scores are not actual results. Example purpose only.

equipment matrix
Equipment Matrix

Above scores are not actual results. Example purpose only.

service provider matrix
Service Provider Matrix

Above scores are not actual results. Example purpose only.

  • Include a contract agreement with the RFP
  • Match RFP to selection criteria matrix
  • Create comparative scores
  • Use wider score range for weighting
  • Properly weigh criteria values
desired result
Desired Result
  • Increase credibility
  • Validate your selection
  • Create a reusable method
  • Augment the decision making process

Choosing the best vendor from a group of qualified service providers can be a daunting task. Determining specific requirements in advance and communicating factors for success with potential providers creates an equitable and decisive way to subjectively make a decision.

By using the weighted matrix methodology you will be sure that all aspects of the request are covered and the groundwork for a successful comprehensive agreement between parties produces the desired results.

vendor selection
Vendor Selection
  • Questions?
  • Comments?
contact information
Contact Information

Dana R. McCormick

Wells Fargo Home Mortgage

MAC X3901-011

7485 New Horizon Way

Frederick, MD 21703