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Business Case and Vendor Selection

Posted: Thu 01 Mar 2018 12:02 pm
by darrenj1471

I have a question about the appropriate/required order of events. I gathered business requirements and have run a robust vendor selection process and I am at a position where I know who the preferred vendor/solution is.

Obviously, each solution had differing costs so I couldn't complete a business case until now. My question is, can I notify the successful vendor and begin contract development in parallel with internally getting a business case approved or do I need to wait for BC approval before notifying the winning vendor and starting contracting?

Thanks for your responses.

Re: Business Case and Vendor Selection

Posted: Thu 12 Apr 2018 4:46 am
by rohansharma

I would like to start this off by saying that I am going to try to provide answers to these questions based on my experiences and knowledge I have regarding Project Management methodologies, and principles.

To be concise with my answer, you cannot determine a "successful vendor" and begin contracting before a business case is approved. This is the case due to following reasons:
  • There is NO PROJECT until it is signed off and approved for a GO AHEAD! What happens if you contact the "successful vendor" and start contracting, but end up fighting flaws in the business case which stopped it from getting approved. Some vendor prices and terms may change by the time business case gets approved again. So, to avoid any sticky situations or even costing your company money, it is better to hold notifying vendors until the project is given a GREEN LIGHT.
  • Also, the individual who is approving the Business Case might want to revisit your success criteria you have in place for vendor selection. That will also leave you in a place where you might not have a cancelling clause in the agreement you entered with a vendor before BC approval.
Hope this was helpful. I would like to point out again that every organization has different methods and frameworks put in place so it is possible that in some cases, doing so would be OK. But, the best practices would be to hold off, until getting the Business Case signed off and approved.