Selecting the right service provider

Things to consider

Choosing a service provider is dominated by one word – choice. Scrap that, three words – the right choice. 

Let’s break this down a little bit….

When conducting business there are just some tasks that you can’t do yourself. These tasks need to be outsourced to a third-party supplier (also known as a service provider) that will perform the necessary tasks on your behalf. 

It all sounds straightforward – if you can’t perform a task, hire someone else to do it for you. Yes, the concept is easy enough to understand. But the thing is – with the number of service providers that are available online and in your particular industry, how do you select the right one? 

Because there’s just so much choice out there. 

And the problem with this is – if you don’t complete your own due diligence and select the best possible supplier for your business, you are burdened with a supplier that cannot meet deadlines, doesn’t communicate properly and that fails to perform their task with the necessary skill and experience required. And where does that leave you? Frustrated and unable to perform yourself.

It’s a zero-sum game. 

But worry not, there is something you can do about it.

How to choose the right service provider

Choosing the right service provider is like choosing the right pair of shoes for a particular occasion. Choose correctly and you will sail through the day, not a worry in sight (nor a blister to be found). Choose wrong, and you are left with sore, achy feet, unable to walk an inch without wincing in absolute agony. Not ideal.

And this process of “choosing” starts with the service provider selection process.

Ø  Wait. What’s the service provider selection process?

Exactly what you think it is. UpGuard defines it as a “series of steps organizations use to assess business needs, determine product or service requirements, and source third-party partnerships that fulfill these needs and requirements”.

An easy enough concept to grasp, to be sure. 

First off, it’s important that – before you are knee deep in the service provider selection process – you develop a checklist that can be used when weighing up one service provider against another. Your checklist should include the following criteria – 

The 11-point checklist

The obvious considerations – 

1.         Price – obviously when it comes down to choosing a service provider with whom you are going to enter into a mutually beneficial relationship, price and bang for your buck is on the top of most people’s list, especially with the current rise of living costs causing cutbacks and tightening of belts. But the lowest price shouldn’t be the deciding factor. The goal should be to get the highest value or worth for the agreed price. It’s important to add that while the cheapest price may seem enticing, this can often be a reflection of poor quality of work, insufficient experience or perhaps hidden terms and conditions (even lawyers make mistakes sometimes) that result in you paying more than what is originally quoted. All of which can land you in hot water if you aren’t careful. Ask questions – ensure the potential service providers give you details of every line item that you will be billed, also ensure that you request the fine print so that you are fully informed of what you’re getting involved in.

2.         Quality of product or service – at the end of the day, the buck stops with you. If your service provider delivers poor quality work or fails to deliver on the agreed upon day, your clients will blame you. Not your supplier. By not ensuring that the quality of the service and/or product is of a high standard you risk both current and potential clients assuming your work is not up to scratch. Again, ask questions – enquire about turn-around times, ask for referrals from other satisfied clients. Do your due diligence. As set out by Volopay “If it’s a product, check their samples before choosing the service provider. If it’s a service, inquire if the employees are well-trained and what training they went through. Some standards have to be met by the employees who render the service. Check if they do. Pricing is obsolete if the product quality doesn’t meet your expectations”.

3.          Verify reliability – this leads us back to business presence. Here it’s important that you verify whether or not the service provider completed projects, in what time frame and whether or not their clients were satisfied with the work. You need to be able to rely on your service provider to perform as agreed. If there’s any indication that they may not be able to, perhaps you need to relook at who you’re getting into bed with. 

4.         Delivery timings – carrying on from whether your service provider is flexible enough to be able to meet your requirements, comes the need to ascertain what their ordinary delivery times entail – are their turnaround times a few days or a few weeks after receiving instruction or after receiving an order? This is important not only to manage your own expectations but those of your clients as well. 

5.         Sustainability and financial stability – being able to rely on a service provider includes the assumption that they’re able to settle their financial responsibilities and operate as normal. Should your service provider go out of business while conducting services or providing products to you, it can result in your own business being in upheaval as you try to pick up the slack. As set out by Volopay –  “See if they had any instances where they couldn’t pay financial liabilities on time, or had to get financial assistance. Check if they can continuously cater to your supply requirements and scale up if needed”.

The less obvious considerations – 

6.         Flexibility – this is all about how quickly your service provider is able to respond not only to changes in business requirements but also to changes in your clients’ demands – there is often a need for modification or improvement in product line or service offering, as demanded by a client. If your service provider is not able to adapt to these changes on the fly, then perhaps you’re barking up the wrong tree. It’s your job – at this point – to ensure that your service provider is able to meet changes and improvements with gusto. As Business Gateway sets out – “Flexible suppliers help you respond quickly to changing customer demands and sudden emergencies”. And that should be top on the list of crucial things – especially when keeping in mind the speed with which business moves nowadays. 

7.         Business presence – this may not reflect – initially – too favourably on start-ups or newly formed businesses, but…. It may be worthwhile to check how long your service provider has been in operation for and how many customer reviews they have. Because their business presence reflects their reputation and standing within their industry. Obviously, this doesn’t mean you shouldn’t consider start-ups or fledgling businesses, it just means that you must go into the partnership with your eyes wide open. Engaging with a start-up or fledgling business will also depend on your needs and what you expect from your service provider. Perhaps your service provider is so niche that their “newness” is not a factor.  This will all depend on the circumstances. The best thing to do here is to look up reviews, especially the negative ones in order to understand exactly what you’re getting yourself into. Online presence will also be important – do they have a website? Are they on LinkedIn or Instagram? Or are they fly-by-nights relying on their (perhaps) cheaper price to gain clients? Always do your research. 

8.         Clear communication – Nat Turner said that “Good communication is the bridge between confusion and clarity” and that’s pretty apt for this section. Regular communication with your service provider will be necessary for an ongoing, successful relationship. If you are ever uninformed about delivery times or hold-ups, that will only lead to frustration on your side and irate clients who you won’t be able to service. Without clear communication, there can be disagreements about what needs to get done, how it should get done, timing expectations and other important crucial aspects of your transaction. As Business Gateway sets out – “You need your suppliers to deliver on time, or to be honest and give you plenty of warning if they can’t. The best suppliers will want to talk with you regularly to find out what needs you have now and how they can serve you better in the future”.

9.         Training – this is a really “nice to have” but worthwhile considering when weighing up service providers. Training programs, helpdesks offering unwavering support whilst at the same time ensuring upgrade regularity and project planning are decisive weapons in your arsenal of top shelf service offerings. Be sure to seriously consider these when conducting your due diligence. 

10.   Customer Service – an often overlooked but crucial item is customer service and after-sales service. Here it’s important that you check whether the service provider has a team to support you after you have decided to utilise their service offering. Is there a dedicated team to implement the project and more so than that, is the team able to follow a properly managed – and documented – procedure? If the implementation process sounds too random then it’s probably not the right choice. Linked to this is a service or help desk facility. How is the after sales service and support managed? Is there a proper tracking system with the ability to prioritise and provide feedback in place?

11.   Data protection – this is vitally important if your requirement involves cloud-based products and hosting services. You need to find out where your valuable data will be stored. Which data centre is your service provider using? Does it conform to international standards? You also need to find out if your service provider has proper security and backup procedures as well as crucial disaster recovery sites in place. Anything less than the absolute best in this regard is simply not good enough. The risks are too great!

What happens next?

With the above checklist in hand, you can begin the service provider selection or procurement process.

1.         It starts with defining your business goals – what are your needs and requirements? Here it’s important that all those involved in the service provider selection process know what products or services the business needs, why the business needs these products or services, and how the company will ensure quality control throughout the procurement process.

2.         Develop a list of prospective service providers– make a list of potential service providers so that you can consolidate and organize the multitude of suppliers according to what they offer and what benefits they are able to provide your business. Once you have this list, it’s time to send out a request for information (or RFI) to each service provider. According to UpGuard“Sending out an RFI will allow your organization to learn more about a service provider’s product or services and assess its ability to achieve your business needs”.

3.         Screen service providers using the criteria checklist (as set out above)– As UpGuard sets out – “After an organization develops its criteria checklist, it should begin to assess all service providers using the document. To thoroughly vet service providers, organizations must utilize a combination of the service provider’s RFI response, public customer reviews, and third-party risk management software”.

4.         Develop a shortlist and meet with service providers – at this point you should set up product demos and service delivery meetings with potential service providers. By doing this you’re able to further assess a service provider’s suitability and match by judging what comes out of the horse’s mouth. 

5.         Draft service provider agreements – aaaah the old agreement – something lawyers are well equipped for. Once a service provider shortlist is compiled, you can begin drafting the agreements. As this will be a legally binding agreement, you should take time to ensure that all your i’s are dotted, and t’s crossed. This is the time to iron out all details. It’s also worthwhile noting that an established and reliable service provider should already have a proper service level agreement in place.

6.         Conduct service provider due diligence and onboard – according to UpGuard “While organizations should conduct preliminary service provider due diligence and submit security questionnaires as part of the service provider screening process, completing other formal due diligence procedures before onboarding is essential”

And that’s selecting the right service provider – in a nutshell of course.

AJS is the supplier of web-based software that includes full legal accounting and practice management software. We are service providers ourselves. While we will be subjected to the above process ourselves, we believe that it’s crucial that you are armed with all the relevant information to ensure that you pick the right service provider or supplier for you.

This may be us. It may not be. 

The aim of this article is to arm you with the necessary information to ensure you are able to make the best choices for you. In this regard, we wish you luck.

(Sources used and to whom we give thanks: Business Gateway; UpGuard; Indeed; Volopay and Procurement Tactics). 

To find out how to incorporate a new tool into your existing accounting and practice management suite, feel free to get in touch with AJS – we have the right combination of systems, resources and business partnerships to assist you with incorporating supportive legal technology into your practice. Effortlessly. 

AJS is always here to help you, wherever and whenever possible!


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