Most companies hold the line when it comes to vendors. They prefer staff to use preapproved companies so economies-of-scale can be realized for cost efficiencies. But adding a new vendor might be the right decision if you gain significant value from the new partnership.

Change is hard though, and the vetting process, which is sometimes done through requests for proposals (RFPs), is often a long and painful process. This handy checklist might make it a little easier. It outlines the critical factors you should consider when selecting a vendor.  

Minimum Requirements

• Company history including years in business and annual sales volume
• Demonstrated financial solvency (or an accountant’s comfort letter for privately held companies)
• Ability to deliver expected products and/or services (i.e., employs trusted security controls, uses a technology platform, has past experience in industry)
• Policies for security, privacy, data breaches, disaster planning and business recovery
• A contract review process that includes terms, renewal and required service-level agreements
• Sound audit reports (e.g., SAS 70, SAE 16, HIPAA)
• No pending litigations, fines or complaints
• Demonstrated legal and regulatory compliance
• Verified insurance and license documentation
• Positive client references

Additional Considerations

• Depth of experience servicing specific industry or vertical
• National presence of business locations 
• Strategically located warehouse/distribution network
• Ability to scale based on program growth or increased need for product/service
• Ability to expand beyond initial scope of contracted product/service
• Certified MWBE (minority- and woman-owned business enterprises) or certified disabled veteran-owned business
• Quality awards or certifications that company has achieved (e.g., ISO 9001)
• Documented record of continuous quality improvement over several years
• Significant current alliances and/or partnerships 
• Commitment to delivering program efficiencies and cost savings
• Dedicated budget for research and development
• Long-range plan for innovation of products, services and delivery system

Account/Customer Service

• Ease of working with main point of contact
• Professionalism of account team
• Quality of work provided
• Proactive guidance and recommendations
• Effective problem solving and conflict resolution
• Providing value beyond agreed-to contract terms