Align on Our Top Pick
You’re so close to completing this vendor selection effort, bravo! The start of this phase can feel a bit un-exciting – except for folks who love negotiating – so remember that this is a critical part of success and stay the course.
The decisions we’re driving and information we’re gathering at this stage are necessary inputs to the big event: aligning on a solution and implementation partner to move forward with. All of the discussions, demos, and analysis have been leading to this.
This Phase at a Glance
In the Negotiation & Alignment phase, our goal is to confidently decide on the go-forward solution, considering everything the selection team has learned through the process.
A great facilitator makes this high-stakes portion of the vendor selection easier by compiling a ton of information and presenting it in an easy-to-understand manner. Keep using your “read-me” summaries and make sure to answer “so what?” with each piece of information.
Here are facilitator activities at a glance:
Support pricing discussions
Get best and final proposals
Compile analysis and recommendations
Facilitate alignment and decision discussions
Here are selection team activities at a glance:
Lead vendor negotiations
Provide candid input on preferences
Align on tool selection
At this point in the project, our vendor count goes from two or three to our final selection. Nicely done – that took a considerable amount of time, effort, and care to accomplish.
Key Activities
Let’s walk through each of the activities in this phase, with what success looks like and considerations to work through. The first activity is led by the negotiator, and the remaining by the facilitator.
Lead vendor negotiations
Typically, a leader from the vendor selection team (or a specific representative identified early in this effort) leads negotiations with vendors. This activity describes what I recommend the negotiator work through, and the next activity includes facilitator support.
The negotiator needs to have enough gravitas to engage with leaders from the vendor team, and enough authority to navigate options and tradeoffs. In some instances, we’ll have a functional and technical lead tag-teaming negotiations.
Work with the facilitator to schedule pricing calls with the remaining vendors and to get a summary of the options we’re considering. If you have specific data points you like to refer to during negotiations, make this clear to the facilitator, so they can prepare the information.
Additionally, compile any budget information the facilitator may not have access to, including potentially:
Our existing solution cost
Our target budget
The highest you can go without escalating to the next round of decision-makers
Preferred contract duration (for example, “we prefer three-year contracts but would consider extending with a specified maximum annual increase”)
It’s also helpful to have a sense for commercial levers and how we are thinking about them. For example, we can expect to balance:
Payment timing
Contract duration
Renewal price increases
Fixed (milestone-based) versus variable (time-and-material) implementation pricing
If vendors’ proposals include scope that’s not truly required for us to succeed, consider working with the facilitator to have vendors provide pricing with and without the nice-to-have items, so we can make a more informed decision on what to proceed with.
A lot of these enterprise solution providers have similar approaches, so look for opportunities to understand and navigate the ways they go to market. To take two examples:
Vendors often have the best discounts near the end of their fiscal year, since they’re aiming to hit quotas. Use any perceived leverage with caution and care.
Some vendors’ deal desks won’t unlock the next level of pricing until we say they’re the “vendor of choice.” But we typically want to discuss pricing for the last several options, so do your best to convince them these negotiations are worth their time.
Within each initial pricing discussion, expect the facilitator to make brief introductions and then to take over in leading the discussion. Ultimately, we’re seeking to lock in reasonable ongoing and implementation pricing for our needed features and functionality. This may require several back-and-forth’s via email or discussion; I find that it can be more efficient for negotiators from each side to connect directly if we’re several reply-all’s deep on an email thread.
And always remember that we’re seeking a partnership – in my experience, negotiating a vendor down to the lowest imaginable price doesn’t set us up to partner going forward. Advocate for yourself, within reason.
Support pricing discussions
The facilitator can help the negotiator succeed by providing a one-page summary, along with the full vendor proposal packet. Make sure to cover, for each option:
Our latest ranking
Key items we liked, along with any outstanding questions we’re working to answer
Implementation timeframe
Implementation cost ranges and notes (including any discounts already applied)
Annual cost ranges and notes (including any discounts already applied)
Any scope or approach differences among options that would warrant pricing differences
Ask the negotiator if there are specific data points they like to refer to during pricing discussions, and include these in your materials.
As facilitator, I typically provide logistical support in scheduling the first negotiation discussion and attend (again, providing background, introducing everyone, and turning it over to the negotiators). It often turns out that the main negotiators connect with each other directly after several rounds of discussions, so the facilitator’s role may diminish as we proceed through negotiations.
Get best and final proposals
Once you’ve supported negotiations with each vendor, compile their best and final proposals. These are often order forms with their best pricing, a statement of work with clear scope and timeline, and terms and conditions.
Your legal team will want to review all of these for the finalist, but it may not be worth their time to review the final three sets. Work with your project sponsors to navigate this as well as you can: likely at least giving the legal team a heads up that you’re sending over materials soon, or potentially having them review several finalists (if terms and conditions differ substantially between options).
Compile analysis and recommendations
This step puts the facilitator through their paces. Compile analysis based on all of the information gathered through this process, with clear options, and your best thinking on the path forward. Make support materials easy to reference, likely through links from the relevant portion of your summarized analysis.
Expect to have a pretty thick deck summarizing your findings throughout the vendor selection. I like to provide an executive summary of the analysis and decisions to this point, and include an appendix section for each major decision point in the project.
Work with project sponsors to navigate whether it’s more helpful to share a recommendation from the facilitator (or project sponsors), or to facilitate a more open-ended alignment discussion.
You’ve received best and final pricing from vendors, but I typically like to include a 25% to 50% buffer on implementation pricing for budgeting and expectation purposes. We’ve done our best to uncover and address as many surprises as we can, but there will still be rocks to uncover as you dig into the details with the implementation team.
Consider including a buffer for licensing costs, too, depending on how conservative you’ve been in user or transaction counts.
Facilitate alignment and decision discussions
This is the moment you’ve been working toward: getting clear on the solution that we’ll move forward with. In some cases, the best partner is obvious to everyone, and the alignment discussion is merely a formality. More often, we come into the alignment discussion with different thoughts, and the facilitator plays an important role in presenting information clearly and guiding the group to choose the option that’s best for the organization as a whole.
I recommend meeting with each decision-maker in a 1:1 setting before the group discussion to make sure you understand their perspective, and to give an opportunity to address questions or concerns in a lower-stakes environment.
I tend to ask our favorite set of questions yet one more time, after the selection team has reviewed the latest proposals and analysis:
Any options they’re unwilling to consider further (and why)
Rankings for the remaining options
What questions they need answered before feeling confident in moving forward with an option
You’ve likely noticed an update to the follow-up questions bullet: it can be very easy for us to get stuck in analysis paralysis with “just one more question” at this stage.
On the one hand, what’s a few more days of analysis in the grand scheme of using a solution for years? But the challenge comes when we stack several rounds of “just one more question” and “just one more demo” and are adding weeks rather than days to the consideration effort.
As the facilitator, work with the selection team to prioritize follow-ups and questions – and get clear which must be addressed for confident decision-making, versus which can be tackled in implementation. If you still find yourself with a long list of follow-ups, work with project sponsors to navigate tradeoffs as well as you can.
In the initial alignment discussion, share rankings and opening thoughts, and then have each selection team member provide candid input on their preferences. Make it clear that we’re aiming to align on a solution together – waiting to share you input until the meeting-after-the-meeting doesn’t work well in this case! Draw out distinct thinking and aim to get to the “why” behind questions and concerns.
As facilitator, be sensitive to silence and ambiguous concerns. You may have an initial meeting, gather and share follow-up answers, and then come back together to make a decision. If one meeting is turning into three or four, work with project sponsors to clear a path forward.
We’re aiming to align on a solution and partner that we’re confident will meet our needs – while recognizing that we’ll never have perfect information. We’re doing the best we can with the information we’ve worked hard to uncover.
It can be a bit uncomfortable navigating surprises and changes in thinking at this stage, but that may be an indication that the selection team is truly digging in and weighing options well against each other. (It’s certainly a balance: we don’t want to change our thinking entirely based on one piece of feedback… and yet we want to weigh the entirety of what we’ve learned and synthesize well.)
In a software selection that my FlexPoint teammates led, the selection team ended up choosing a lesser-known option whose customer footprint was mostly in Europe. It wasn’t a product name on anyone’s shortlist at the beginning of the project, but they steadily proved themselves able to meet requirements and provide a good fit on culture and ways of working. It wasn’t a risk-free decision, and there were still bumps to work through in adopting the tool, but the solution and vendor have really worked out well in the long run.
In short: I work hard to avoid being too risk-averse and only considering market leaders, while taking seriously the risks and potential benefits of each option.
After the group aligns on the path forward, do a final pass through the vendor selection summary presentation: represent findings from throughout the vendor selection effort in a compelling, organized manner. Think of explaining to someone who wasn’t involved in the project at all why you made each major decision.
The appendix sections are likely intense at this point, or you can choose to refer to other standalone documents. Make sure to take a step back and share the narrative from the whole project, since the audience for this presentation may include those who haven’t been close to the process all along.
Advanced Class
This phase can be a tough test for a facilitator. If the group isn’t aligning on a selection, seek to understand the question behind people’s questions, or the concern behind their concerns. In some instances, we encounter general fear and uncertainty, not specific concerns.
Matthew Dixon and Ted McKenna drew out this concept nicely in their 2022 book, The JOLT Effect: How High Performers Overcome Customer Indecision. Their research of business-to-business sales processes uncovered that people are often more afraid of messing up than they are of missing out, and this shows itself near the end of a vendor consideration effort.
If FOMO (fear of missing out) is the driving concern, then we’re excited – and maybe nervous – to move forward with a new solution to gain new benefits. But if FOMU (fear of messing up) is stronger, then we may get cold feet as we approach the big decision.
We know how our current solution (or manual process works), and maybe it’s not seeming so dated or clunky as we think about the stakes of this decision. What if we’ve missed something major in our consideration of the potential new solutions? It’s a daunting thought. While we’ve spent this entire vendor selection effort trying to eliminate surprises and address concerns, we never truly know how things will be until we choose a path.
As facilitator, remind the group of the thorough analysis and consideration you’ve all done. Walk back through the major decision points and how you’ve been addressing follow-up questions as you’ve learned more. And remind the group that you’ve also been practicing navigating challenges together, so you’re building skills that will be helpful through the implementation and adoption effort, too.
At the end of the day, we’re aiming to choose the best option we can and then make the most of the partnership we’re beginning with the selected vendor’s teams.
Tools & Artifacts
The main tool we use in Negotiation is a one-page summary with key attributes of each options, so the negotiator has critical information close at hand.
To inform our Alignment efforts, we rely on:
A compilation of best and final proposals, with a summary that provides context and helps selection team members navigate proposals well
A summary of the vendor selection effort, analysis, and conclusions, with a clear narrative of what we’re seeking and how our efforts have gotten us to the point of aligning on a solution and implementation recommendation
