Last week, I wrote about Venkat Devraj, who argued that the vendor selection process needs to be much more collaborative if IT departments want to prevent business units from going rogue with technology deployments. That post defined the problem that Devraj was out to fix. This one addresses how he’s going about fixing it.
Devraj, co-founder and CEO of SelectHub, a technology evaluation platform provider in Denver, claims that by enabling all of the stakeholders in a technology project to have a voice, and dramatically streamlining the procurement process, SelectHub helps to eliminate the drivers of the “shadow IT” problem. To understand how SelectHub accomplishes that, I opened this portion of the interview by setting up a scenario in which a mid-size logistics company needs to procure a transportation management system. I asked Devraj to outline what SelectHub’s process would be for procuring the TMS, and he began by summarizing the way IT procurement typically works now:
What often happens today is when, say, a TMS is needed, the department that needs it will enter a requisition for a new TMS, and the IT department, which is busy because it’s often understaffed, will wait for a business analyst or a project manager or a program manager to be freed up that will get assigned to the project — that may take a few weeks. Then the project manager will meet with the business users, try to gather requirements, then they will map those requirements back to the company’s existing IT infrastructure. They may talk to Gartner, they talk to Forrester, they may bring in a software selection consultant. The procurement department may get involved, they may look at existing vendors, partners that they have that have those capabilities. They will also do an RFI or an RFP; the results come back, there is a panel of evaluators from the end-user community, from the IT department, from the finance department, then the finance department will short-list the vendors. Once two or three vendors are short-listed, they may initiate a proof-of-concept or a trial, which may run for 30 days or 60 days. In the meantime, the business pain that initially triggered the need for a new TMS, that hasn’t gone away — that has only become worse, and users are sitting there in frustration. Sometimes they’re not even consulted about all the final vendor capabilities, vs. what they wanted.
The streamlined process that SelectHub enables, Devraj said, begins when the request comes in through the requisition system and opens up a project in SelectHub:
The stakeholders from the IT department, finance department, procurement, etc. can automatically be added to the project. They can specify their requirements for any new software, such that it needs to integrate with SAP, or with a particular system in order to be compliant with a certain security standard. So all of those governance requirements can be auto-populated into the project as part of the overall requirements. SelectHub also will allow the end user who created the request to pull up a template of best practices, which is crowdsourced, so they can see what other companies their size, in their industry, specify as requirements when they look for a new TMS. They can also add other end users, other business stakeholders, so this can be a lot more collaborative. And while all of this is happening, IT has full visibility even though they haven’t waited and assigned a project manager. All of this happens in a matter of days, right from requirements gathering all the way to vendor finalization. So that’s really the change in the process that we are looking to enable.
Devraj went on to explain how the system identifies prospective vendors:
We have created a proprietary algorithm that goes out and looks at several different sources. Number one, it looks at traditional vendors that are out there in that space, that are having conversations on social media, that are talking about their products on different B2B websites, review websites, etc. It will capture some of that data and compare it with some of the industry heavyweights based on things like the research that is available in the public domain from Gartner and Forrester. Vendors will often brag about being featured in Gartner’s Magic Quadrant, and that’s all available in the public domain, so our algorithm can pick it up. Then we also contrast that data with what our users are telling us. We have over 14,000 enterprise users, all doing actual real-world projects, finding different software, different technology partners. So there is an element of crowdsourcing, where our users are able to validate whether or not these vendors truly meet these requirements.
Vendors, meanwhile, are actively seeking to be listed in SelectHub’s database, Devraj said:
A lot of vendors realize that we are providing this service — it has become a very common thing where each month we will see several vendors reach out. It’s a free service for vendors, where they can list themselves in our database, and they can go through the process of being vetted against the requirements that our community of users has shown us to be relevant for their organizations. And then the community rates them, based on having gone through a selection project, where they may have done a proof of concept or an extended trial with these vendors, and the scorecards will help validate whether these vendors are credible or not. It’s kind of a self-balancing system, where the vendors can come in and be represented, and the buyers are able to rate and rank them.
I wrapped up the conversation by asking Devraj if he could have one do-over since he co-founded SelectHub, what it would be. He said he would have formed a customer advisory panel a lot sooner.
We have about half a dozen customers that we have cherry-picked to be on our customer advisory panel. The amount of wisdom and advice we get from them is incredible. It has really helped us evolve the offering — we have seen growth of over 200 percent in the last 12 months. If I had it to do it all over again, we would have set up this kind of customer advisory panel maybe three years ago, right when we were starting — maybe even before we got started. We have some phenomenal IT executives that are part of the panel — for example, Kroll CTO Bill Krivoshik, and David Buckholtz [SVP of corporate information technology] from Sony Pictures. With people like that, who have walked in these shoes for a long time, we get the benefit of learning from them and avoiding costly mistakes. That is irreplaceable, and I wish we had done it much earlier on in the process.
A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.