Evaluation: Selecting for Success

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EvaluationSelecting for Success

• Dana McCormick
• Wells Fargo Home Mortgage
• Delivery Services
• Baltimore PCC
• Education Seminar
• March 20, 2008

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Objective

• 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.

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Vendor Definition

• A third party that performs functions on your
  companys 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

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Desired Result

• Select the correct vendor/service/product that
  will meet your needs
• Remove/reduce the element of surprise
• The end agreement is good for all parties
  involved

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Determine the Need

• What are the drivers for use of a third party
  vendor? Factors to consider
• Business requirement
• Cost reduction
• Improved quality/performance
• Increased flexibility
• Speeding project delivery
• Gaining access to expertise not available
  internally
• Providing increased availability of services
• Create a plan. Stick to the plan.

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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.)

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Risk Assessment

• Risk conditions could include
• Financial impact
• Legal or regulatory compliance
• Confidentiality
• Vendor connectivity to client networks
• Direct customer interaction
• Vendor mitigation of personnel changes
• Internal operations analysis

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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.

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The RFP/RFI

• Objectives
• Identify critical success factors
• Identify barriers to success
• Integration of vendor activities with corporate
  business strategy
• Legal framework of an agreement
• Ease of migration

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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 terms

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The Process in Action
What are the business requirements for selecting
a print vendor?

• Compatibility with Operations
• Confidentiality
• Security

• Price
• Flexibility
• Service
• Certifications

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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?

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Evaluation

• 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.

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Recommendations

• 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

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Single Function Matrix
Above scores are not actual results. Example
purpose only.
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Equipment Matrix
Above scores are not actual results. Example
purpose only.
17
Service Provider Matrix
Above scores are not actual results. Example
purpose only.
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Desired Result

• Increase credibility
• Validate your selection
• Create a reusable method
• Augment the decision making process

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Conclusion

• 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.

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Vendor Selection

• Questions?
• Comments?

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Contact Information

• Dana R. McCormick
• Wells Fargo Home Mortgage
• MAC X3800-011
• 8480 Stagecoach Circle
• Frederick, MD 21701
• 240-586-6351
• Dana.R.McCormick_at_Wellsfargo.com