5 Steps to Evaluate Technology Providers in 2023

According to BPI Network, 44% of businesses “seek alliances for new ideas, insights and innovation.” A recent report in the Harvard Business Review (HBR) indicates that 94% of tech executives view innovation partnerships as necessary to their strategy.

In today’s world, companies are under tremendous pressure to deliver world-class digital experiences for multiple internal and external stakeholders. As such, more and more business leaders start understanding the impact that digital transformation can have on their company growth, stability, and sustainability.

In their search for innovation, they turn to long-term technology partnerships that “are often able to offset research and development expenses, accelerate commercialization timelines for new products or services and add much-needed expertise and flexibility to an organization’s day-to-day operations,” as per HBR.

Whether you’re a CEO, CTO, Product Owner or Project Manager, being responsible for evaluating and hiring a technology provider involves a considerable commitment, and it is not a decision quickly taken. This decision alone can make or break your innovative project.

In this article, we will share the five steps you should take to ensure an extensive and unbiased evaluation process when choosing a technology provider in 2023.

Contents

Ways to evaluate tech providers

1.   Create an expert “buyer team” to oversee the selection process

Assembling a proper buyer team is the first step in the process of choosing the potential tech partner.

A healthy buyer team has a strong understanding of technical and interoperability requirements, security, risk assessments, and budget allocations. A critical perspective is most needed in these processes, and buyer teams that do not have a potent mix of views are most likely headed for purchase regret.  

It’s highly recommended that your buyer team contains the following roles and skills: CTO/CIO, Project Manager/Lead, Solution Architect, Product Owner, HR, procurement, legal, and finance.

2. Set up the evaluation criteria

Before you even begin your search for vendors, your team needs to sit together and outline what matters most for your organization and the desired outcome from this collaboration. Is it a one-time project that needs to be developed? Or maybe you’re looking for an ongoing technology partner to support multiple digital transformation projects within your organization. Taking a good, hard look at your company’s technological needs is one of the crucial steps that need to be taken.

After that, it’s a matter of establishing different criteria that will help you evaluate any tech supplier you come across in this journey.

There are usually five categories to evaluate your tech vendor in the early stages of the process.

a) Technical match 

What’s the technology setup? How will the project be managed? How will project delivery and integration be handled? How will your partner meet your technical requirements specification or project roadmap? What’s their talent acquisition strategy? What’s the expected time to staff your Extended or Managed Team?

These are just a few questions to ask yourself about a potential vendor. You certainly do not want to skip on these and discover that the technical process will be slowed down by disarranging. 

b) Functionality

What technology or skills gap are you trying to fill in with your future vendor’s help? This is a functional question. You need to define properly from the beginning what it is that you need from your technology provider and re-affirm it during introduction or discovery calls with potential partners.

c) Support

Do they offer staff training and ongoing support? Do they provide development services throughout the entire product/solution life cycle? How will they ensure smooth and seamless project transition and knowledge-sharing? How will change requests be processed?

d) Vendor stability

Is it an established and profitable company? What are their success stories/client cases? Do they have a culture that aligns well with your tech needs and your company’s values?

It’s nothing worse than joining forces with a technology provider that has a toxic work culture and vision entirely different from yours. It’s for sure a recipe for disaster.

e) Pricing

What’s their pricing model and how does it match our expectations? What contract and licensing terms do they impose? No need to remind you that pricing is essential and needs to be aligned with your budget in the long run.

That was just a general overview of things you should consider in evaluating every potential tech provider you employ to help you with your custom software development projects. Feel free to add specific needs and objectives to each of these categories that are more closely related to your organization.

Are you looking for a reliable long-term technology partner?

3. The evaluation process

Once you have set your evaluation criteria, you need to assign weight to each category you’ve created. How important is a particular measure for your organization? Rate them all from high (is this essential?) to medium (is this rather desirable than crucial?) and low (is this optional?), and you will have a more straightforward overview of your priorities before entering any business discussions with potential technology providers.

After you’ve established your priorities, the team is ready to start reaching out to different companies whose services and solutions may fit the criteria and requirements needed for your tech projects. When doing so, it is vital that they schedule discovery calls and request every supporting documentation they might have. Good communication is key at every step. You need to reference your detailed requirements throughout the entire tech provider evaluation process and ask the right questions to ensure that the buyer team understands clearly how a particular vendor will perform against your needs.

4. Leverage the power of reviews and testimonials

Reviews and recommendations are crucial in this process. Conducting independent and thorough research to validate each provider is essential. At the end of the review process, you should be able to answer these questions effortlessly:

  • What’s their typical customer portrait?
  • What types of solutions do they develop for other clients?
  • How do they handle communication and project management?
  • How do they meet deadlines?
  • What’re their strengths and weaknesses?
  • Can they be considered as a real technology partner, offering full support throughout software development lifecycle or are they only good for short-term projects?

 

These are some fundamental aspects that your buyer team needs to have in mind when reviewing tech providers. Not all of them will make it to the shortlist, but it is imperative that the ones that do are the best possible match for your organization.

5. Shortlist vendors and choose the winner

In the final step of deciding on a technology partner, you may want to add or delete some requirements or add new vendors to the list. It’s absolutely okay at this point. It would be best to keep in mind that you want to eventually get to a phase where you have 1-2 strong providers that you will continue to test and match against your selection criteria before making the final decision. Once you have the winner, negotiate terms and be ready to embark on a journey that will take your company to the next level.

Conclusion

In 2023, an organized and systematic approach to evaluating technology providers will save you much time and energy and get you the best outcome possible. It is a rational decision that will impact your organization’s future. Make sure you’ve covered all your bases and that the technology partner that you end up choosing is the one that will help you take the next step in your company’s digital transformation journey.

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