How sacrosanct is the 'evaluation criteria' in a sourcing project?
If you have been a buyer, have you come across a situation where the score card clearly recommended a particular vendor, but the management decided to select another vendor....
If you are a seller, have you come across a situation where you were certain that you were ahead in the race by a mile, and at the last moment, some other vendor walked away with the deal, and the client desperately tried to convince you of the decision, owning to subjective factors such as 'cultural alignment' and 'synergy with existing relationship'? And if you have been a buyer, have you come across a situation where the score card clearly recommended a particular vendor, but the management decided to select another vendor, due to similar reasons?
Such situations often reflect the weakness of the 'evaluation criteria' or the process, or both. For each sourcing event, an evaluation criteria is developed beforehand, parameters listed, weightages assigned and sourcing team scores each vendor on those parameters. The criteria includes all subjective parameters too, and should anyway take into consideration all such aspects, as per assigned weightages. So, if any one parameter swings the deal at the last moment, it means that the weightages have been tampered with, or the evaluation criteria has been kept aside in the process. In any case, it is not a fair process and the Procurement person should challenge this and handle it appropriately.
What should be done to avoid such situations? Usually such situation happens when a certain stakeholder was not aligned in advance, and he or she disregards the evaluation criteria eventually. So, time and effort should be spent to identify all relevant stakeholders early on in the process and align them on to the evaluation criteria. The other reason for such a situation is when a certain parameter appears very important to the stakeholders later, while the score card doesn't give it the due weightage. So again, time and effort should be put in early on to ensure that the weightages are correct and reflect the intent of the process fairly.
What should a Procurement person do if such a situation arises? Fairness and transparency is the cornerstone of any sourcing process. If it is felt that the evaluation criteria is recommending a certain vendor unexpectedly and the 'favourite' vendor is scoring low, Procurement person should stand by the evaluation criteria and challenge any suggestions which dilute the sanctity of the score card. If however, certain aspect of the criteria was genuinely wrong, then it should be recorded in alignment with all stakeholders. Similarly, if management wants to over ride the score card due to 'relationships' or 'cultural' or any other such reasons, it again should be recorded for fair audit purpose. In no situation should the evaluation criteria be modified retrospectively, to accommodate a certain vendor.
Would like to hear from the procurement and sales community if they have encountered such situations and what did they do to handle it!