Introduction

In my experience many of the extensive spreadsheets of assessment criteria reveal the expected when it come down to the “finalists. As many find there are many criteria that they meet. So, what can you do to make a better decision of who you select.
This is a conversation between me and one of my clients on how to make the final decision between two banks in outsourcing global services.

The  Buying Perspective

Client: “None of those responding will be able to meet everything we want and so making the final choice will rest on who differentiates themselves better on soft decision-making criteria” (i.e. those which are difficult for my client to measure)…We need to be clear what we are trading off and clear about the relative importance of different criteria. Some attempt was made to include softer factors like strategic partnership potential into the RFP. (Request for Proposal) “What is difficult to judge is if one contender has, say, 70% of what we need, “what is the chance of getting the rest?”

The biggest difficulty for soft factors is people you currently use are a known quantity, “warts and all” and those that you do not use offer plausible solutions to the current service problems. For example XYZ Bank ,  the current service provider are seen as the worst for providing day-to-day service yet, under RFP scoring for basic service, they scored the highest. So, great care is needed in what you are measuring. The discrepancy, in this example, is between stated low failure rates in the RFP and softer issues like people’s experience of poor problem resolution.

Client: “Another problem is making a judgment about the depth of quality people in a contender’s organisation. Over the last six months we have been sending explicit and coded messages to those  contenders with a realistic chance to this end and significant movement has already been achieved without a concessions.  This process should achieve most movement before we come to the final negotiation.
We are still undecided about which process to adopt after completing due diligence  i.e. negotiating with just one contender or two in parallel. It won’t be clear until we get into detail of due diligence and the other issue is letting current supplier know they haven’t got the business.  The concern would be that the service deteriorates before new supplier is ready to takeover.
We have a very powerful position as each contender, who have passed due diligence, knows that we still have a choice of supplier. We are unsure what is the best way of getting underneath the RFP to test the soft issues. For example:

• Which contender has the best problem resolution skills? 
• How do you get into those soft areas to form a view? 
• How useful are following up on each contenders’ Client references?

One way of combining the reference visit with the idea of simulation to increase the focus and value of such visits.  Research suggests there are ways you can interview people which were more successful than traditional historically focused questioning, e.g. spending time just reviewing what the candidate has done.  The more successful approach focused on giving realistic case studies where the candidate had to describe how they would handle a given situation.
Such a simulation focus also gives us a better opportunity to uncover how to measure the soft differentiators and gets beyond what the contender’s Senior management thinks actually happens at the operational level – a key thing to do. When it comes down to it, this  partnership is base on a few personalities, e.g. when Bill is there, there aren’t any problems…..but as soon as he is on holiday things start to go wrong. This is in spite of all the emphasis on automation as the key success factor.
In the final analysis it will come down to “do you feel right with these people?” because the final contenders are all in the same market with broadly the same core competence with different strengths and weaknesses which cancel each other out.
So, the key question is – how skilled are we at uncovering data which is consistent and allows better quality comparison between contenders in the areas that you are finding it difficult to differentiate one from another? Often, there is a lack of skill in those conducting the reference site visit.  Whilst many are good at asking questions they will not have received help to developing and using questions which serve the above purpose, for example, exploring the problems and their consequences of failed trades
The reference visit has to validate that perceptions of soft criteria are correct or they are wrong. Then creating simulations which focus on the perceived areas of mismatch, perceived difference. Then decide how that can be achieved on a reference visit including its structure what preparation the hosts have to do beforehand.

Reference Visit Preparation

Such exercises are most successful where:

• A consistent approach is taken which facilitates more rigorous comparisons to be made in these softer areas
• Crucial matches and mismatches are highlighted
• It clarifies the areas which you wish to trade-off or accept you are prepared to forego
• Apart from due diligence exercises and interviewing probes for areas of difference not similarity
• Generate the types and content of questions to be asked, including 2nd/3rd level probes
• Then rehearse and coach those doing the visit in specific interview skills which has proved powerful in the past
• User Group members views on the format for such visits as a basis for designing the reference site visit.

The Result

This preparation and execution of two site visits to the “last two standing” was illuminating to say the least. My Client selected the one contender who stood out as being able to solve problems in a way that reassured the Reference Site Team that they could work with them even when problems occur.

The Issue for Key Account Teams

1. How does our preparation for a site visit differ from buyers like these?
2. How well do we coach those people conducting the site visit?
3. How clearly defined are the soft differentiators likely to be and how we handled both our strengths and weaknesses?

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