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Determination of vendor viability

Library Systems Newsletter [July 1988]

Vendor viability is one important criteria that can be used in order to limit the number of vendors to whom the library's RFP (Request For Proposal) will be sent.

There are many ways of defining vendor viability, none of which can provide absolute insurance against a vendor going out of business or deciding to cease supporting a particular product. However, the application of criteria similar to those which follow can reduce the risks of a library being left "high, dry, and alone" if a vendor should suffer a significant down-turn in sales or leave the market.

The following guidelines are intended to be used in the assessment of vendors of all but the smallest systems, small micro computerbased systems selling for less than $50,000.

To qualify as viable, a vendor should satisfy the following criteria:

  • be capable of delivering integrated software for acquisitions, serials control, circulation, and patron access catalog,
  • have made a minimum of $3 million in sales in the past year,
  • have an installed base of at least 20 systems,
  • have sold at least 10 systems in the past year, and
  • employ a staff with at least six full-time programmers.
  • The rationale behind these criteria is that it takes at least a year to develop each function, a minimum of $3 million in sales is necessary for a company to support both significant development and marketing efforts, a customer base of 20 is sufficient to support ongoing software maintenance even if the vendor experiences a downturn in system sales, and 10 sales a year will generate enough income to underwrite a basic software enhancement program. LSN readers will note that this type of information has been included in the annual reviews of turnkey and supported software vendors published in the spring issues of LSN for the past several years. This information comes in handy for narrowing the list of vendors to whom the RFP is sent. In a formal procurement, this information is often required as part of each vendors' RFP response. In some cases, however, it's against corporate policy to reveal this information.

View Citation
Publication Year:1988
Type of Material:Article
Language English
Published in: Library Systems Newsletter
Publication Info:Volume 8 Number 07
Issue:July 1988
Publisher:American Library Association
Place of Publication:Chicago, IL
Notes:Howard S. White, Editor-in-Chief; Richard W. Boss and Judy McQueen Contributing Editors
Subject: Library automation systems -- selection process
Library automation vendors -- financial stability
Record Number:4454
Last Update:2022-08-07 00:46:56
Date Created:0000-00-00 00:00:00