What should the vendor requirements cover?

• Financial viability. Is the company successful and likely to remain successful? If the vendor is a public company, it's easy to get a hold of its financial results and, assuming they are properly audited, to analyze its prospects. Private companies are more challenging. While some may be willing to share some financial information under a non-disclosure agreement during the sales cycle, it's a lot more difficult to evaluate this information. In the end, you will have to make a leap of faith based on your analysis of their success in the market. Remember that all successful, large, public CRM companies started as small, private outfits (as did hundreds of others that did not make it).

• Customer references. This is, for me, an essential criterion, unless you are willing to take a chance on a wonderful and unique technology—and you have a good backup plan in case things don't work out as you had hoped. With smaller vendors, check references early in the evaluation phase so you don't waste your time on candidates that do not have appropriate references.

  An appropriate reference is a customer in a field similar to yours, using the tool in approximately the same way as you will, and with about the same number of users. For example, if you provide financial services, a reference from a software company is not that useful. If you are looking for a marketing automation system, a support-tracking reference is not what you want. If you want to implement with 300 users, a reference with 20 users is insufficient. (The opposite is not that great either: the 300-user reference is likely to have vastly more resources available to implement the solution, and they may need complicated features that would just get in the way of your small organization.)

• Geographical presence. Although I can't imagine picking a vendor solely because it is in your backyard, there's much to be said about accessibility, both in the short term and long term. Taking this point to extremes, would you buy a system from a vendor that's headquartered on the other side of the world, with no local sales force where you are? If you had a choice of two vendors, one local and one remote, would you be more likely to go with the local vendor? Be sure to consider not only the availability of the sales force, which is often quite good, but also the availability of support and other post-sales services for the long-term.

• Business model. Is ASP acceptable? Desirable? Required? Is a dual model (ASP and packaged) important?

• Technical vision. Can the vendor articulate a technical vision? Does the vision make sense? Does it match your needs? Do you believe the organization is likely to sustain the technical vision? For instance, is there a strong CTO? Do you see a depth of technical leadership within the company beyond a key individual? (This last point is important for a small vendor: if the CTO were to leave, would the company survive?)

• Business vision. Is the marketing and business development strategy attractive? Does it put you and your needs in the center of the vendor's focus, or on its margins? If you like the business vision, do you think the vendor is likely to be successful with it?

• Attention to customers. Better vendors use a better sales process, provide more customized responses to RFPs and other requests, and in general lavish more attention on their customers. Don't mistake pre-sales attention for post-sales support quality but do take into account the quality of the pre-sales process when evaluating the vendor.