Analyst firm TowerGroup has released a new analytical tool for use by procurement departments and vendor selection process leaders within financial institutions.
The TowerGroup Vendor Selection Processor (VSP) is a software-based, analytical tool designed to streamline the scoring phase of a vendor selection initiative. The tool is used to store vendor evaluation criteria, manage scores from those engaged in the selection process, and then analyse and report the results. At the end of the process, the VSP identifies the vendor best-suited to a financial institution's budgetary and business needs.
David Dietrich, manager in the Specialised Advisory Group at TowerGroup, says the tool can be provided to TowerGroup customers as part of a wider engagement, or licensed to any organisation as stand-alone software.
TowerGroup initially developed the VSP at the request of a top ten banking institution that was seeking a more robust scoring model to leverage in global vendor evaluations. It was first used to support the search for a vendor partner that would ultimately operate in more than 30 countries around the globe. The analyst firm has since developed the product further to make it a packaged commercial offering.
TowerGroup claims that using an automated tool to manage the vendor selection process makes it easier to evaluate a new vendor or benchmark an existing vendor against industry best practices. Moreover, it gives financial institutions transparency into a vendor's strengths and weaknesses to establish a strong negotiating position and manage operational costs.
"The amount of detail involved in vendor selection can be enormous, particularly when an institution is looking to secure or evaluate a technology partner on a global scale," said Karen Cone, TowerGroup president and CEO. "Managing and getting the most out of vendor selection has been a perennial challenge across institutions of all sizes, and certainly one we've seen first-hand on countless occasions of supporting clients through the process. There is a tremendous marketplace need for a tool that helps make vendor evaluations more consistent, more structured and, ultimately, more objective and actionable."
"We believe the Vendor Selection Processor is truly a first-of-its-kind offering, in terms of the framework it provides," said Tim Sharman, managing director of the TowerGroup Specialized Advisory Group which developed the VSP. "There are sample questions and categories provided to help guide the creation of RFPs and specific evaluation criteria.
There are methodologies outlined to put structure and standards around how evaluators score each individual element. And there is the clarity of the final outputs it provides."
Sharman notes the VSP also helps ensure that participants in a vendor selection initiative from different functional areas, such as procurement and line of business, are following the same process to reach their destination - by leveraging consistent methods of evaluation and scoring.