How to Create a Service Provider Evaluation Process That Earns Its Keep

Once an RFP has been sent out to that long list of potential service providers, you might be inclined to sit back and think “job done.” However, the period during which the service providers are preparing RFP responses is a golden opportunity to design an evaluation process to assess and analyze the responses when they arrive. Effective and insightful evaluation models can be sophisticated without being complex and ought to play an integral role in the overall selection process. But it’s not always obvious how to construct these models so that they produce the results you need.

Here are the Top 5 keys to running a successful evaluation process:

1. Set up effective stakeholder participation and management. Extend the scoring invitation to the widest group of stakeholders possible to maximize legitimacy of the evaluation process and ensure collective buy-in. Comprehensive client team briefings, scoring guideline packs and presentations of results to all scorers will build a sense of communal decision-making. A service provider recommendation based on a scoring exercise that encompasses all interested stakeholders is a powerful one.

2. Employ a meaningful and appropriate system of weightings and scoring mechanisms.
To evaluate multiple RFP responses, you’ll need to score each service provider across a range of categories. Design the weightings so that the evaluation model reflects your relative priorities; the #1 ranked service provider needs to meet your specific objectives. To derive the relative weighting for each scoring category, use the objectives set out in the RFP coupled with the project’s critical success factors. Don’t forget the simple tricks: require an even number score to avoid an easy “middle of the range” option.

3. Develop a model that is flexible and dynamic.
Avoid the mistake of simply aggregating all scores for an overall service provider ranking. This approach won’t be of much use in determining the preferences of specific scoring groups, which is crucial from a stakeholder management perspective. A model with full transparency of scoring groups will draw much more meaningful conclusions. The model should be flexible enough to perform sensitivity analysis and should allow you to track the changes in scores and ranks through the multiple rounds of scoring.

4. Use the evaluation process for more than simply ranking service providers. A sophisticated model can provide more subtle and useful analysis. It should be able to identify a specific weakness in a particular service tower (or a category within a tower) to help focus the service provider discussions on plans for improvement. A sound model can also reveal two individuals with a difference of opinion within the client team, which can be resolved or mitigated once uncovered.

5. Remember that evaluation models are only part of the decision making process. Selecting the right service provider is a pivotal decision in the sourcing journey, and all aspects of performance must be considered. An evaluation model that captures scoring and ranking by a broad team of stakeholders is the epicenter of the selection process, but don’t forget to take into account interaction with the service provider team, the business case and an assessment of risk. Considering all these factors will help you select the right sourcing partner.

By Owen Wheatley, Director, ISG

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