Supplier Identification and Selection
Establish criteria for evaluating and selecting suppliers. Rate and rank suppliers and potential suppliers in such a way that they can be classified, for example, as ‘preferred’, ‘Tier 1’, etc.
Improvement Planning
Practices-Outcomes-Metrics (POM)
Representative POMs are described for Supplier Identification and Selection at each level of maturity.
- 1Initial
- Practice
- Best endeavours of available personnel.
- 2Basic
- Practice
- Send a Request for Information (RFI) to potential suppliers.
- Outcome
- There is an overview of potential suppliers to assist in the selection process.
- Metric
- % of IT suppliers selected based on a standardized approach
- Practice
- Undertake supplier selection process using a defined process.
- Outcome
- All suppliers are selected fairly.
- Metric
- % of suppliers selected via the defined cooperative process
- 3Intermediate
- Practice
- Establish a detailed process to select IT suppliers, including an initial list of candidates, RFIs, short list, RFPs, and final selection.
- Outcome
- Supplier selection follows a standard process that can be reproduced.
- Metric
- % of IT suppliers selected based on a standardized approach
- Practices
- Implement a supplier classification policy.
- Criteria may include spend, business criticality of services, strategic importance, complexity/frequency of changes in requirements, and switching costs.
- Outcome
- Classification allows relationship management to be effectively focused on prioritized and preferred suppliers.
- Metric
- % of the supply base that is classified
- 4Advanced
- Practice
- Distinguish between a first-time bid and a renewal bidding process to ensure that selection criteria reflect the corporate business strategy and include a cultural fit assessment.
- Outcome
- Supplier selection in a renewal of a sourcing contract takes into account that the incumbent has a much deeper organizational knowledge.
- Metric
- % of IT suppliers renewed based on a standardized approach
- Practice
- Fully integrate supplier selection with the organization-wide procurement process.
- Outcome
- Selected suppliers are suitable based on performance and cultural fit
- Metric
- # of supplier landscape analyses conducted organization-wide% of selected suppliers fitting in with the company culture aspect
- 5Optimized
- Practice
- Evaluate the supplier's own business case during the process of selecting the optimal supplier.
- Outcome
- The supplier has a realistic opportunity to deliver on a timely and reliable basis.
- Metric
- % of selected suppliers realizing their business cases that are evaluated
- Practice
- Continually review and optimize the supplier selection process and criteria, and their interaction with the organization-wide procurement process.
- Outcome
- Realized synergies can be optimized.
- Metric
- # of joint meetings with procurement# of synergies realized