Finding a Vendor That Fits

Performing a thorough vendor evaluation can be challenging. Here are some key factors to consider as you embark on your next vendor search.

 

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It can be quite challenging to invest the necessary time and energy to perform a thorough vendor evaluation. To add to the complexity, vendors will often present data in various ways, which can make it difficult for a credit union to choose which vendor is the best fit for the job. Due diligence is necessary in finding a vendor with all the right credit union qualities. With this in mind, here are some key factors to consider as you embark on your next vendor search.

Does the vendor understand the unique challenges and needs of the credit union community?
Credit unions’ distinctive philosophy of being member-centric as opposed to profit-oriented creates a rare operating environment. Many credit unions find great benefit in working with vendors that share this philosophy and focus. Ask potential vendors about their ownership structure, organizational philosophies and goals, and percentage of total business credit unions represent.

What type of reputation does the vendor have?
Any vendor can provide a few key reference clients. Instead, ask the vendor for a full client list. A quality vendor should be willing to provide a list of all their clients. This enables you to select the reference contacts that are most similar to your own situation. With the list in hand, query other credit unions that have used the provider about their experiences. Remember to ask about the quality of support, responsiveness, how involved the credit union community is in determining future product plans, and for any recommendations. You may also be interested in learning whether the provider sponsors users groups or whether informal networking occurs amongst current users. These types of collaborative activities can help you get the most long-term benefits from your system or service.

Does the vendor offer a variety of solutions to meet your changing needs?
Our world is constantly evolving. Sure the vendor may be the right choice today, but if your needs change or grow substantially over time, will the vendor have the solutions and capacity to meet your changing needs? Consider choosing a vendor with a robust product offering that can meet your evolving needs in terms of scalability, deployment models, and functionality. Ensure that the vendor’s system or solution has configurable business rules and open access to code so that it is flexible enough to connect a variety of independent systems or services. This element alone can make the difference in easily integrating with other service offerings.

How is the service or product priced and what is included?
Certainly pricing is an important consideration when evaluating alternatives, but it’s important to look beyond the bottom line figure. Ensure you fully understand what is (or is not) included in the price, and analyze the short- and long-term cost considerations.

If a vendor presents a solution that appears to be the lowest-priced but costs twice as much to support as another, the higher-cost solution may be the better choice. There are many things to consider when evaluating price. How will the pricing structure change with increased growth and how will price increases be managed? Are there hidden costs not included in the base price such as access to administrative systems or product enhancements? Is there a cost to implement the solution or convert to the new service and, if so, how does it compare to other alternatives? Is training and documentation included or is that an additional cost? It is important to fully understand the total cost associated with each vendor’s pricing structure in order to make an informed comparison.

And finally, will you have a voice in determining future product direction?
A smart vendor consults its user community when determining product direction. Who after all is more qualified to assist in determining product enhancements, new functionality, or weaknesses than the actual users?

Ask pointed questions on what role the user community plays in the vendor’s strategic direction. Ask whether there are consistent user-group meetings, and whether the vendor has a steering committee comprised of active users, both large and small. The more integrated a vendor’s user group is in determining product direction, the more influence your credit union will have when making enhancement requests.

Another benefit of a strong user community is that it enables users to take advantage of fellow users’ findings and enhancements. This collaborative community enables credit unions to take advantage of new services and identify best practices. Finding a vendor that promotes sharing of custom code and education – especially in the cooperative credit union community – can be invaluable to a credit union over time.

Corporate Network eCom is a member of the credit union community that develops eCommerce products and services exclusively for credit unions. For more information on eCom, please contact your corporate credit union or Cheryl Harris, national sales director, at (888) 656-4050, ext. 6027, or visit www.memberstreet.com.

 
 

Feb. 21, 2005


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