Selecting the Right Vendor or Consultant

Outsourcing technology projects can be a useful option for many nonprofits. Once you've decided to outsource then the real hard work starts. To select the right person, business or organization to work with it is important that you carefully analyze the reasons for outsourcing and the project to be outsourced. (Please see the article "Determining When to Outsource" for more information.) The reality is that there are a lot of contractors out there who work with technology. The hard part is figuring out who is best suited to work with your organization.

In order to make the final decisions, your team will need to review the proposals, check references, and participate in product demonstrations in the case of software or review work samples in the case of WWeb or database developers. Your team will need to agree on the criteria you will use to evaluate the final proposals and decide whether a rating system will be used. You'll find that your decision will probably depend on a mix of issues including the skill of the contractors, their style and ability to work with a nonprofit, and how good a match they are for the specifics of what you are trying to do. These decisions about criteria or mix of personal and technical skills are extremely important. If you are able to decide what is most important to you, then you will have a much easier time deciding who is the right person to work with.

Two recently published lists of principles for contractor and others involved in nonprofit technical assistance can be instructive. One list published in 2002 by Innovation Network is more general and another list of principles by Summit Collaborative is also useful. These can help you determine what is important to you when you are choosing between contractors. They also can be very helpful when you are interviewing or checking references.

Excerpts - InnoNet's Nine Principals of Effective Capacity Building

1. Providers must respect the organization's capability to build its own capacity.
   Capacity builders must recognize that the organization is the one who is really in charge of its own capacity-building. Most of the expertise needed to build the organization's capacity is going to come from within the organization. Providers also must determine an organization's unique needs, rather than relying on formulas, to do effective building.

2. The organization and the provider must trust each other.
   The greater the trust, the better the nine principles work; and the better they work, the greater the trust in the relationship.

   Everyone involved in the process must feel free to:

   • communicate openly
   • ask for help when they need it
   • bring forward any and all ideas
   • listen and learn from others involved in the process

3. The organization must be ready for capacity building.
   A few constant indicators will tell you if an organization is ready.

   The organization must:

   • be open to change and willing to question itself
   • be able to clearly describe its mission.
   • have key members bought in to the capacity-building process
   • understand how capacity building will further its mission
   • be prepared to commit the necessary time and resources to capacity-building
   • be generally stable internally. An organization in crisis is never ready.

4. The process must involve ongoing questioning and feedback.
   A successful provider must facilitate a climate in which constant questioning and feedback are encouraged. Through doing this true understanding is established.

   It is a mistake to go in as an "expert" and have already decided what you will give an organization. Instead, you need to really find out what organizations need and how your skills can meet those needs

5. The process should utilize use team and peer learning tools.
   Peer learning and team learning enable more people to contribute to the process. They bring many more good ideas into the learning process. Perhaps most importantly, they help to enforce the idea that the process is in the hands of the organization and the individuals in it, not just the provider.

6. Providers must accommodate different learning styles.
   Different people have different ways that are the best for them for learning. They may learn by:

   • doing or experimenting
   • talking about the process
   • thinking things over
   • using visual explanations

   • using verbal explanations

     Successful capacity builders must take these into account for the group they are working with and address them accordingly.

7. Providers must fully understand the complete context of an organization.
   Providers must take into account all of these forces to understand the context of an organization:

   • mission
   • values
   • organizational culture
   • environment
   • culture(s) and circumstances of its constituents

8. Providers must have a holistic perspective.
   All people and all parts of an organization are interrelated. A successful provider looks at all of the interconnections that make up the whole. Change an organization can only succeed if it involves people from many levels: staff, constituents, and board members.

9. Providers and organizations must understand that capacity building takes time.
   Effective capacity building takes place over time. It must be introduced to an organization as a process that takes place in stages so that capacity-building activities continue to be integrated into the organization's work.

Summit Collaborative Technology Support Provider Principles

We ask contractors in our network and ourselves to live up to the following principles. All of these can be modified into criteria or questions that inform your selection of a contractor or research about a contractor's performance.

1. I/We primarily work with nonprofit organizations and understand that they are mission-driven organizations that often work under financial and other constraints. I/We tailor our service to be especially sensitive and responsive to the unique needs of a nonprofit.
2. I/We believe that the integration of technology into nonprofits has a value that far exceeds simple efficiency improvements. I/We work to help nonprofits realize the positive impacts that technology can have on program delivery and organizational systems.
3. I/We believe that the true total cost of any technology includes the time and money necessary for assessment, planning, evaluation, training and support. I/We factor these costs into our discussions and pricing.
4. I/We believe that strategic decisions about the use of technology should be made to support the mission of the nonprofit. I/we know this requires a careful assessment by organization stakeholders of the improvements sought in a particular business system or program. This ensures that any application of technology is appropriate. I/We therefore advocate to nonprofits that non-technology staff play an essential role in technology planning and decision-making.
5. I/We believe that the use of technology within nonprofit organizations usually results in substantial changes for staff and others. If handled properly, these changes offer nonprofits an opportunity to reinvent themselves as effective 21st century organizations. I/We believe that it is our responsibility to honestly help a nonprofit understand how to take advantage of and effectively deal with the tensions that often arise within these ‘change' opportunities.
6. I/We believe that nonprofits should do as much work as they can internally to understand and articulate their needs before contacting providers for technology advice or solutions.
7. I/We believe that regular and clear communication between myself/ourselves as a provider/providers and those I/we serve is central to the success of our working relationship. I/we have a responsibility to stimulate and encourage ongoing communication, to strive for clarity in contracting and to work to ensure delivery or service on time.
8. I/We believe that it is my/our responsibility to transfer adequate knowledge to the nonprofits I/we work with so they can sustain their use of the technology, solve problems on their own, and get the help they need when appropriate.
9. I/We believe that it is my/our responsibility to ensure that the nonprofit clearly understands, in non-technical terms, exactly what a certain technology tool does and what its total value and cost are. I/we work to ensure that nonprofits understand the range of choices they have and the ramifications inherent in each choice.
10. I/We will engage in professional development and networking activities to stay up to date on current issues in the complex and evolving nonprofit technology field.

You'll need to carefully decide what is most important to you based on the outsource solution you require and the type of relationship with a contractor you are looking for. However, we think these two sets of principles can help you develop criteria for what is and is not important to you. Coupling these with simple questioning about the contractors specific technology skills can be helpful.

Remember, all the criteria or questions in the world are useless unless you take the time to discuss among yourselves within the organization your thoughts about potential contractors you've met. You also must decide if it is important to talk with others who have worked with the contractor. In most cases this is an essential step. Many call this "due diligence" and it's often hard to find the time to make the calls to check up on references.

Due Diligence

"Due diligence" is checking the reputation, viability, and business ethics of a technology provider through reference and background checks. Your RFP should request three references and you should call them all. Also, try to find other clients that who aren't offered as references by the provider. Sometimes clients are listed on the provider's Web site. or you can work through your various networks. It is often a good idea to request references from other organizations that are similar in size, budget and staffing as your own, so you're comparing apples to apples.

In certain situations, especially when you are purchasing a proprietary product, you'll want to perform a background check to determine the viability of the provider. You don't want to sign a contract, pay one-third down, and have the company go out of business. If it is for-profit public company, you can obtain a Dunn and Bradstreet report or look up its financial profile on Yahoo. You can also ask for a copy of its financial statement.

Your goal when requesting financial information from vendors is to observe their intent be transparent with you about their business health. A vendor that appears to hide its financial information may be hiding the fact that it's in trouble. An ideal situation is a vendor that is very open about its business goals, track record, and future business plans. Other viability questions include:

• What is its long-term interest in working with nonprofits?
• How long has it been in business?
• Are nonprofits on its advisory board?
• What is its client contingency plan if it goes out of business or is acquired?

Interview and Product Demonstrations

You should also plan on conducting interviews, sometimes two rounds, with the top contenders. This will give you an opportunity to assess the provider's communication skills and get a feeling for the chemistry between it and your organization. The key to a good interview is being prepared with the right questions and having the right people from your staff in the interview. You'll want to ask a mix of questions that helps you understand how each provider approaches its work with clients and its skills in relation to the specific project. Your team should write up a list of standard questions to ask each provider as well as specific questions that arise after reading the proposals. Try to reach a balance between telling the consultant about the project and asking questions about the consultant's own experience.

Give the provider ample opportunity to ask you questions. This can sometimes be the most valuable information you'll gather. Look for providers that ask questions that demonstrate an interest in or understanding of the your organization, the challenges you face on the project, and what you are looking for.

And The Winner Is

Once your team has completed these steps, your organization is ready to make a final decision. 'It may be that you have a clear winner or it may be close. You should begin and conclude negotiations with your top candidate before communicating the decision to the other candidates in the event that your first choice does not work out.