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LRH Financial Vendor Strategy

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Scenario
You are a project manager in the human resources department for a global investment management firm, LRH Financial. You are currently updating your benefits administration to an external company; this is expected to be a minimum 5-year operational commitment. As part of this move, you are revising your benefits options, updating the employees on the changes, revamping the intranet to include self-service benefits administration, and redeploying about 20 human resources benefits staff to new positions with the human resources department. The vendor that will be taking over benefits administration operations has not yet been chosen. Due to a lack of resources in the information technology department, a vendor will be used to update the intranet and train employees on the new self-service functionality. It is not yet clear how the redeployment of the benefits staff will be completed. In the past, this type of activity has been handled by a boutique management consulting company.
You just met with your boss, Pat, the Vice President of Human Resources. Pat emphasized that you will have responsibility for all the contracting, negotiating, and vendor management activities. You will need to work closely with purchasing and accounts payable as you complete these activities.

Question
Prior to sending out the RFP, you determined that your vendor strategy was to work with the "best of the breed." If one company could provide all the services you needed and it had the expertise needed, you would go with that company. However, if you instead found a number of companies that had smaller but deeper areas of expertise, you would work with a larger group of vendors. The manager of the purchasing department agreed that it was okay to look at vendors that were not on the preferred provider list; however, they would rank those vendors lower.

You determined that you would use a point-based evaluation. The criteria you developed will be assigned a weighting and a number of points. Each vendor will be ranked according to the vendor's total number of points. You hope that this will make the process more objective and take some of the issues and personalities out of the decision-making process.
Describe your approach to the proposal evaluation. Attach a spreadsheet (in Excel) that lists the evaluation criteria you recommended previously and their weighting. Describe in the e-mail how the spreadsheet will be used, what the columns mean, and how the weightings are determined.

Explain the bid and proposal process to include preparing RFP requirements, evaluating bids, and contract formation.

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Solution Preview

According to the previous discussion the criterion used for evaluation will be as follows:
This material is from the past posting: "
1. I will rate the delivery schedule, quality and service and balance it with the price of the services that are being provided by the vendor.
2. I will evaluate the origins of the services being offered by the vendor. I will give a positive rating to that vendors that provides services including software developed in the USA.:
3. I will evaluate the capabilities of the vendor with regards to delivering the solution any where in the USA. Do they have competent staff and personnel in place?
4. I will evaluate the connectivity of vendor especially with regards to the ability to provide tools, training and updates over the internet;
5. I will evaluate the standards, policies and practices that vendors have in place;
6. I will evaluate the experience that vendors have in providing HRM solutions;
7. I will examine if the vendor has executed successfully a benefits administration system on an intranet.

Corresponding to these six criteria the six criteria on the spread sheet are: ( the last two criteria have been clubbed together.

Criteria
1. Delivery, quality, price
2. Origin of goods
3. Competence of ...

Solution Summary

This solution talks about vendor strategy in LRH Financial.. It then explores how vendor strategy will work to its best.

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Developing a RFP

Scenario
You are a project manager in the human resources department for a global investment management firm, LRH Financial. You are currently updating your benefits administration to an external company; this is expected to be a minimum 5-year operational commitment. As part of this move, you are revising your benefits options, updating the employees on the changes, revamping the intranet to include self-service benefits administration, and redeploying about 20 human resources benefits staff to new positions with the human resources department. The vendor that will be taking over benefits administration operations has not yet been chosen. Due to a lack of resources in the information technology department, a vendor will be used to update the intranet and train employees on the new self-service functionality. It is not yet clear how the redeployment of the benefits staff will be completed. In the past, this type of activity has been handled by a boutique management consulting company.
You just met with your boss, Pat, the Vice President of Human Resources. Pat emphasized that you will have responsibility for all the contracting, negotiating, and vendor management activities. You will need to work closely with purchasing and accounts payable as you complete these activities.
Question
You had your meeting with the project sponsor and the other decision makers, and they approved your general approach. Now you need to develop the request for proposal (RFP) for distribution. You have decided to use a number of vendors for the project, preferring deep expertise to a vendor who can "do it all." Develop a list of criteria against which all the proposals will be evaluated. It should include the following:
? background information on the company and project
? the bid/proposal process from the vendor's perspective
? the criteria that will be used to evaluate the vendors
? timing with which the vendor must comply
? descriptions of any specific terminology or specialized terms
? open questions or issues
NOTE: You do not have a list of specific requirements. Create them to the best of your ability using your own experience and Internet research. It is acceptable to use placeholders for the requirements. The process and flow of information/decisions are critical.
Question 2
Pat and the other decision makers are anxious to sign a contract with a vendor as soon as possible. They are strongly urging you just to sign a contract with the boutique consulting company you have always used for the staff redeployment activities. You are not convinced that it is the best firm to do the job, and you are concerned about its abilities to work effectively with the human resources team. There have been some differences of opinion in the past, and that firm has sometimes gone around the project manager, directly to Pat. The firm defers to Pat and does not always make the hard decisions that need to be made. (You suspect that this is why Pat wants to use the firm and not worry about looking at any others.) You have not had any experience with the firm directly, but you have heard the same story from several of your peers who have worked with the firm.
Describe your approach to solving this difference of opinion. Be sure to answer the following questions:
? What is the best way to respond to Pat and the decision makers?
? Is choosing this vendor consistent with the vendor strategy you chose during the group project? If not, what are the implications of using the vendor?
? What are the benefits of completing the full-vendor analysis?
? If you chose to go with the vendor, what could you do to minimize the risk of the vendor behaving in the same way? What could you build into the contract to address your concerns?

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