Blog: Craig Schiff

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December 21, 2007

Vendors Benefit from Prior Relationships

I have noticed a disturbing new trend in BPM vendor selection in the past few months. There have now been several instances of vendors being selected solely on the basis of prior experiences or business relationship with that vendor. For example, a media company I am familiar with determined that a specific BPM application vendor was the best fit for their particular needs. However, the CEO stepped in and said that 'since our ERP provider, who we have a long and positive history with, has recently acquired a well-known BPM vendor that is who we are going with'.

I guess I'd feel better if the CEO had focused on the benefits of the future data integration of the BPM and ERP products, or other synergies rather than just the fact that they had done business together in the past. In another instance, a global multi-billion dollar company spent several months going through a detailed requirements gathering and vendor evaluation process. They selected the solution that best met their needs, but at the last minute there was a personnel change at the top. This new team leader decided to override their recommendation and go with the vendor she had used successfully at the last company she worked for. The problem in my view is that success at meeting one company's needs does not necessarily translate into being the best choice for a different company with its own unique requirements. In both of these examples the vendor that ended up winning the business was not the one that best met the company's requirements. Call me old-fashioned, but I believe the most important criteria in selecting a vendor should be how well they address your business requirements. Of course if the vendor is difficult to do business with or has a price that is way out of line then you need to look elsewhere. Also, this approach of buying BPM solutions based almost entirely on prior relationships tends to favor the largest, most well established vendors. This in turn can have a chilling impact on newer, smaller vendors and the competitive pricing and innovative solutions they bring to market.

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