Generally, during selection, two or more service providers are considered. Too many options cost too much time and energy; too few options limit choice. With new services, it is possible that there is little choice, simply because few suppliers have yet to provide these services. When a customer is dependent on one supplier, there is what is called a vendor lock-in. When problems arise with the supplier, continuity becomes a risk because there are few or no alternative suppliers to whom the service could be transferred. A vendor lock-in situation puts a customer in an unfavorable situation regarding contract negotiations.
Selecting the most appropriate service and supplier is a time-consuming activity for which budget must be available. Sometimes senior managers or board members of suppliers and customers reach agreement beforehand, and lip service is paid to the selection process. A pitfall in selection is that the initial objectives may fall by the wayside. This can happen when customers are presented with attractive new services with different options that do not prove to better fit the selection criteria. Another pitfall is to make concessions to the criteria so that a particular service better fits the requirements.
The selection process is divided into the following steps: