Seeking Vendors, the Early Part of Selection

How do you figure out, from within a large range of software vendors, which vendors to start evaluating? I'm curious to see some feedback on what most people use to start researching and narrowing down their list of software vendors before going into an RFI process.

A few years ago we were thinking about this issue and came up with the idea of a preselection questionnaire that could narrow down the list of vendors you'd want to look at. It has evolved and works relatively well, but after a few years it's good to reconsider how it works and see if we can improve based on what we've learned, and on what people suggest.

No matter the methods of identifying vendors, you can usually find some common ground underlying them, which might be used as high-level preselection criteria. The following three examples show that even if you don't use a formal process to identify vendors for evaluation, you still have to come up with a few high-level criteria.
1) Some companies look into a few of the large, well-known vendors because they're well-known.

2) Some companies hear what their competitors or partners have implemented and figure that's a good place to start (or eliminate, depending on how the story goes).

3) Other companies search the Web, looking into what Google spits out.

The first example you might address as criteria about market share. Vendors that regularly get a lot of publicity often have a lot of clients (though not always). In the second example, competitors and partners are likely to be in your industry or somehow related to your industry, so industry could be a criterion for guessing which vendors address your requirements. In the third example, you might be entering certain key types of functionality, hoping the search engine returns a few good results. You need a billing system? So you type "billing software vendors". The results you're seeking then are based on criteria for a certain sort of functionality.

We usually come up with 15 to 20 questions that we think are very high-level criteria for a certain type of software system. Questions about criteria like those listed above. Then we survey the vendors that sell those systems and find out to what degree they target or support clients in each of those criteria. Finally, we turn the very same questionnaire around to people that want to purchase the software, and ask them to describe their company and objectives using the exact criteria the vendors target.

We use our online tool to compare and match that information with all of the vendors' responses. Based on the degree to which each vendor has responded to the questionnaire, the tool weighs possible choices and recommends vendors likely to fit the would-be purchaser's requirements. This is in no way a detailed process. It just helps to get to a short list of maybe five to ten vendors to evaluate. Still, its got to come up with some pretty good recommendations so that people don't waste time evaluating vendors that have no possibility for supporting their requirements. It sets up an auditable formal process for the early identification of vendors.

Sound off. Are market share, industry, and functionality truely useful high-level criteria on which to filter vendors? What about other criteria like corporate structure; cost; localization; and industry standards? Furthermore, shall we consider how a time frame effects these criteria? Is it better to judge a vendor's past accomplishments as more important than how it targets its products now or do those issues need to be balanced in the consideration?
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