BatteriesPlus, the largest, most comprehensive and most sophisticated battery store chain in America has 100 headquartered employees, including 20 in the IT department.

“For any major IT purchase, the decision ultimately lies with the CEO, the COO, the CFO and myself,” said Michael J. Lehman, VP Information Technology.

That said, it is Lehman’s team who must first assess the market, the vendors, and the products. Depending on the magnitude of the project, Batteries Plus will outsource portions of it to a consulting firm who works side-by-side with the IT department to perform due diligence, create the short list, and do contract negotiations.

Said Lehman, “Where there’s a high dollar amount and a high risk to the company, we will work closely with a consulting firm whose expertise lies in the particular area. But it’s a collaborative effort as we need to have the knowledge and understanding of the process as well.”

Although all capital expenditures for technology are approved through annual strategic planning, nothing moves forward without the executive team’s final sign-off. “We have all the necessary roadblocks in place to ensure that we’re staying within budgetary parameters,” said Lehman.

BenefitMall^SM.com is the leading provider of products, services, and tools for brokers selling small-group employee benefits and has 300 employees, 38 within IT.

At BenefitMall.com, CIO Scott Howitt has the business unit manager involved in a variety of ways. At the forefront, he wants clarification on the ROI opportunity from a department standpoint and how it can be measured. Howitt’s role is to then design a decision matrix that’s used to evaluate products and vendors, while simultaneously developing a financial model with the CFO. Once the short list is in hand, Howitt returns to the department head to ensure that what will be delivered will indeed meet the need.

”I want them to put skin in the game too, and if they believe in the project they will start cheerleading it to their people and the technology change over will be a lot easier,” said Howitt.

Who makes the final decision? “For a large purchase, the CEO, CFO, myself and the VP of Sales really have the veto power, but if I’m showing a good ROI, there’s seldom an issue. At that point, we go to the Board together.”

Lexington Medical Center (LMC), a 292-bed metropolitan medical complex that anchors a comprehensive, county-wide health care network, employs 3500 people including 30 in IT.

At LMC, the IS department is given full decision-making power. Once the business need is identified and the IS Steering Committee confirms it’s a new purchase, IS takes total responsibility for finding the solution that will best fit within all the parameters.

Said CIO George Evans, “It’s our job to determine the best option and ensure that it’s compatible with our main clinical information system, runs on the platforms that we need it to, that it’s secure, and that the vendor is viable.”

IS manages the vendor negotiation process as well as they have the technical competence and the knowledge in-house to effectively do so. In fact, Evans signs most contracts for approved capital budget items, while senior management signs the check to make it final.

“Business units identify the need. IS is responsible for providing the solution,” said Evans.

Manitowoc Crane Group, a leading producer of lattice-boom cranes, tower cranes, mobile hydraulic cranes, boom trucks, and related products for the construction industry, is one of three business units of The Manitowoc Company. This group has about 1200 employees in the U.S., of which 22 are in the IS department.

Every large unit purchase at Manitowoc begins with an Economic Value Added (EVA) to determine ROI right from the start. From there, it’s a collaborative effort between the requesting business unit and the IS department who works side-by-side as a supporting function to ensure that the department’s specifications and needs are met.

“We like to keep the business units in the process since they’re going to benefit by it,” said Dan Stuart, Director – Information Services Americas, “though it’s IS’s responsibility to deliver knowledge of platforms, architecture, as well as perform due diligence on solution and vendor options.”

With an EVA in place, a clear spec defined, a vendor short list in hand and the best price, the final recommendation then moves up the chain for approval to the CEO of the business unit.

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Improving the IT Vendor Selection Process: Negotiation