Identifying and Contacting Vendors
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This article, an excerpt from Chapter 2 of Technology Acquisition, discusses how to identify and select the vendors involved in a technology-acquisition process.
As soon as you have a list of prospective vendors that will be included in the process, you need to start contacting them to find out if they are interested in participating in the process. The initial contact is typically made with a phone call or letter, expressing an interest to involve them in a technology acquisition process. I prefer sending a letter addressed to the head of the sales organization. This allows the vendor to either decline quickly or assign the sales effort to the proper account manager. The initial letter is called an LOI (Letter of Intent).
You may also decide to send what is called a Request for Information (RFI) along with the LOI. The RFI is a formal request similar to an RFP (Request for Proposal), but with less obligation to buy. This document can be a list of knock-out criteria that will help eliminate vendors that do not meet your most critical requirements. The RFI is a good tool to use when you have a large number of prospective vendors. It allows you to trim down the list while providing a fair chance for all vendors to participate. The RFI can also be used solely to gather information.
The purpose of the LOI is to state your intent to purchase the technology from the vendor. You should also request an LOI from the vendor, stating its intent to participate in the acquisition process. The LOI usually includes the following information:
A brief introduction of who you are and the purpose of the letter
A statement that you are beginning a technology acquisition process and are inquiring to see whether the vendor is interested in competing for your business
A high-level outline of the business need and desired solution
You should consider sending a Non-Disclosure Agreement (NDA) to each vendor. The NDA is also commonly referred to as a confidentiality agreement. The purpose of an NDA is to protect both companies from disclosing confidential information. Be sure to send an NDA to all vendors before providing them with any confidential information about your company. If they are unwilling to sign an NDA, you need to work with the executive management and legal staff to determine whether to assume the risks associated with sharing confidential information without legal protection.
An NDA is a legal document, so you should have your company's legal representative develop and approve it. An NDA includes legal terminology that, in effect, states that the vendor cannot share information about your company to other companies without your written permission. It may also be written as a two-way NDA, meaning that you cannot share information about the vendor to other companies, either. Regardless of which type of NDA your legal staff chooses, it's a good idea to have a valid NDA to protect your company from confidentiality problems or issues.