Buying Criteria: Why is it Important?

Somewhere in the first meeting with a sales representative, the question about how the evaluation committee will evaluate or select the right solution or service is asked. This is a vital question, yet many people enter that meeting not knowing what they are looking for. They may tell the sales representative, that they are going to develop the criteria as they go along, once they see what is available. Others have generic criteria such as; ease of use, reporting, customer service, and price. This series is designed to give organizations a better handle on buying criteria. In Part I of this series I will discuss the importance of Buying Criteria, and Part II will cover, developing sound criteria.

What are criteria? Businessdictionary.com defines criteria as the “Statement of needs, rules, standards, or tests that must be used in evaluating a decision, idea, opportunity, program, project, etc., to form correct judgment regarding the intended goal.” That means that buying criteria must be the criteria used to form the correct purchasing decision to reach the intended goal.

Let’s explore what are the potential challenges of entering into an evaluation process without solid criteria. Since we know that criteria are used to guide us in our decision-making process, not having criteria will lead to an evaluation committee selecting a solution that will not satisfy the intended goal or objective. Rest assured that if you enter an evaluation with a vendor(s), and do not have any criteria, every vendor’s sales representative will be more than happy to provide you with their criteria. The criteria that they tend to present usually favor that vendor. The vendor’s criteria are typically a strength for that vendor, and relevant to the acquiring organization or industry. Since any criteria provided would be a strength for the vendor, if an organization adopts the vendor’s criteria, the evaluation is slanted in favor of that specific vendor. Should an evaluation committee use a combination of vendor criterion to form their criteria, then whichever vendor gets the most criteria on the list, typically wins. So the vendors are competing to get their criteria selected. The result remains the same, the evaluation committee makes a selection which most of the time does not align with the needs of the organization.

Having broad criteria for your evaluation can lead to problems. Take, for example, the criterion, ease of use, or reporting. These are common requests by evaluation committees or users. Every software system is going to claim ease of use, or have reporting capabilities. Remember, criteria are the set of rules, needs, and standards that will lead to making a correct decision regarding meeting a goal.

Remember buy criteria is your roadmap to selecting a solution that will assist an organization in meeting a goal or objective. Not having criteria is like driving without a map. Unless one is very familiar with the area, and knows where they are going, it is in their best interest to have a map to guide them. Being lost, or arriving at the wrong place can be frustrating time consuming ordeal. With selecting a solution, it can also be an expensive.

This article was written by James Fields, Senior Advisor for Sourcing Advisors, LLC. Sourcing Advisors assist organizations with the acquisition of software and services in the areas of HR, Payroll, Benefits Administration (Health & Welfare), Recruiting, Time and Attendance, Travel and Expense, PEO, and Administrative Service Offerings (ASO).