Buying Criteria Part II: Developing Effective Buying Criteria

In Part I of our article, “Why is Buying Criteria Important?” We discussed that buying criteria is the roadmap that an organization must use in its selection process. We outlined what happens when an organization enters into an evaluation of vendors without criteria, and we touched briefly on broad criteria. Now we will discuss developing effective criteria for one’s evaluation.

Every organization is unique. There are similarities between some types of organizations, such as school districts, but nevertheless, your organization is unique. Therefore, the buying criteria used should be unique. Do not use the criteria from another organization, take the time to develop your own set of criteria that is specific to your organization.

The first step in developing criteria is to start by documenting your goals for the solution. Outline what you want the solution to do for your organization once implemented. These goals should align with the initiatives of the organization. For example, if as an organization the directive is to cut costs, and you are in the process of evaluating to acquire an HR solution. The stated goal may be that by implementing this HR solution, we will reduce our benefit budget by an estimated $X.

The next step is to document your requirements. It is important to know all the functions and task within your current processes. This can take some time, because it requires detailed conversations with each of the employees who perform the various functions and task. The mistake many people make is not getting enough detail, or not probing “why” they perform the task a certain way. Once you have gathered all the information from subject matter experts, then you are ready to draft a requirement document.

The third and final step in developing you buying criteria is to link your requirements to the stated goals. It is important to test your links, to make sure that by accomplishing or meeting the requirement, it will give you the ability to reach the goal. Using our example from above, where one of our goals for evaluating an HR solution is the ability to reduce our benefit expense, I have listed some sample criteria that will give the ability to reach the goal. One thing to note is that the criteria in some cases will be part of the requirements, but the requirements should be the detail for evaluating the criteria.

Goal – Reduce benefit cost by $X.

Criteria
• Provide carrier feeds to X, Y, Z.
• Maintain eligibility rules for plans
• Generate change report for reconciliation

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).