How many vendors should be on our initial shortlist?

Start with 8-12 vendors for initial screening, then narrow to 3-5 for detailed evaluation. This provides sufficient market coverage while keeping the evaluation process manageable. The initial list should include a mix of global leaders with Australian presence, regional specialists, and emerging local providers. Consider your industry's vendor landscape density - niche sectors may have fewer options, while categories like CRM or project management tools offer extensive choice.

What weight should we give to Australian data residency?

Data residency should typically represent 15-25% of your evaluation criteria, though this varies by industry. Healthcare, government, and financial services often require 100% Australian data storage as a knockout criterion. For other sectors, consider your customer expectations, regulatory obligations, and risk tolerance. Evaluate not just primary data storage but also backup locations, disaster recovery sites, and data processing locations.

Should we prioritise local vendors over global providers?

The optimal choice depends on your specific requirements rather than vendor origin alone. Global providers often offer superior functionality, scalability, and integration ecosystems, while local vendors provide better cultural fit, responsive support, and Australian-specific features. Evaluate global vendors with strong local presence (like Salesforce or Microsoft with Australian offices) as a middle ground.

How do we evaluate vendor stability and longevity?

Assess vendor viability through multiple lenses including financial health, market position, and strategic direction. Request recent financial statements or Dun & Bradstreet reports, evaluate funding history for startups, and check customer retention rates. Look for vendors with at least 3-5 years in the Australian market and a growing local customer base. Consider the vendor's product roadmap alignment with your future needs and their track record of successful implementations.

What role should pricing play in shortlisting decisions?

Pricing should represent 20-30% of your evaluation criteria, balanced against functionality, support, and strategic fit. Focus on total cost of ownership over 3-5 years rather than initial license costs alone. Include implementation, training, ongoing support, integration costs, and potential customisation expenses. Be wary of vendors with significantly lower pricing than market alternatives - this often indicates missing functionality, poor support, or sustainability concerns.

How long should the shortlisting process take?

A thorough shortlisting process typically requires 6-12 weeks, depending on complexity and stakeholder availability. Initial market scanning and longlist creation takes 1-2 weeks, followed by 2-3 weeks for preliminary vendor research and knockout criteria application. Detailed evaluation of shortlisted vendors, including demos and reference checks, requires 3-4 weeks. Allow additional time for proof-of-concept exercises if required.

What are the key red flags to watch for during vendor evaluation?

Critical warning signs include reluctance to provide Australian references, unclear data residency policies, or no local support presence. Be cautious of vendors who can't demonstrate experience with businesses of your size and complexity, or those pushing aggressive contract terms with limited flexibility. Watch for over-promising on customisation capabilities, unrealistic implementation timelines, or pressure tactics to sign quickly.

What are the best practices for shortlisting vendors in the Australian SaaS landscape?

Effective vendor shortlisting requires a structured evaluation framework combining local market knowledge, compliance requirements, and technical assessment. Focus on Australian data sovereignty, integration capabilities, local support, and proven track records with similar-sized businesses.

Australian businesses waste significant resources evaluating unsuitable vendors, often discovering critical gaps in compliance or support only after implementation begins.

Implement a structured vendor shortlisting framework that pre-qualifies vendors against Australian-specific requirements before detailed evaluation begins.

Vendor Shortlisting Best Practices for Australian SaaS

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