Evaluation: Selecting for Success

1. Evaluation:Selecting for Success Dana McCormick Wells Fargo Home Mortgage Delivery Services Baltimore PCC Education Seminar March 20, 2008

2. Objective Develop a methodology to objectively evaluate service providers or products, ensuring that the best one is selected for a given situation. The intent is to consider all relevant factors and minimize the subjective issues that can potentially influence such a decision.

3. Vendor Definition A third party that performs functions on your company’s behalf or provides services to your company. Some examples include: • Core Processing • Information and Transaction Processing • Security Monitoring • System Development and Maintenance • Print and Reprographics • Strategic Alliances • Internet Services

4. Desired Result • Select the correct vendor/service/product that will meet your needs • Remove/reduce the element of surprise • The end agreement is good for all parties involved

5. Determine the Need What are the drivers for use of a third party vendor? Factors to consider: • Business requirement • Cost reduction • Improved quality/performance • Increased flexibility • Speeding project delivery • Gaining access to expertise not available internally • Providing increased availability of services Create a plan. Stick to the plan.

6. Business Requirements Can the vendor provide the desired results? Services/products provided by the vendor. • Core product or service • Service level agreement • Reporting • Transition and integration • Fee/cost • Contract requirements • Technology/Security • Required vendor characteristics (minority ownership, certifications, local vs. national, etc.)

7. Risk Assessment Risk conditions could include: • Financial impact • Legal or regulatory compliance • Confidentiality • Vendor connectivity to client networks • Direct customer interaction • Vendor mitigation of personnel changes • Internal operations analysis

8. Due Diligence Components of due diligence include: • RFP/RFI development and issuance • Introduction and overview of desired objectives • Definition of business requirements • Definition of contract requirements • Request for information needed to conduct due diligence addressing the evaluation requirements.

9. The RFP/RFI Objectives: • Identify critical success factors • Identify barriers to success • Integration of vendor activities with corporate business strategy • Legal framework of an agreement • Ease of migration

10. Evaluation Criteria • Ability to provide the product or service • Ability to meet service level requirements • Integration plan • Ability to meet information security and disaster recovery expectations • Control environment • Risk assessments • Agreement to our contract terms

11. Price Flexibility Service Certifications Compatibility with Operations Confidentiality Security The Process in Action What are the business requirements for selecting a print vendor?

12. The Process in Action Meet the needs in the proposal. • Does your company agree to our strict confidentiality agreements? • These are our security requirements. What will your company do to meet or exceed these standards? • Does your organization have any certifications or industry leading practices. • These are our service standards. What will your company do to meet or exceed these expectations? • What is the overall price structure, including postage run rate for our mail?

13. Evaluation • Objective: Develop a procedure to select the best service provider from a group of qualified vendors; making a decision in a fair and objective manner. • Method:Develop and utilize a weighted matrix format as a tool to fairly and objectively evaluate the options available.

14. Recommendations • Include a contract agreement with the RFP • Match RFP to selection criteria matrix • Create comparative scores • Use wider score range for weighting • Properly weigh criteria values

15. Single Function Matrix Above scores are not actual results. Example purpose only.

16. Equipment Matrix Above scores are not actual results. Example purpose only.

17. Service Provider Matrix Above scores are not actual results. Example purpose only.

18. Desired Result • Increase credibility • Validate your selection • Create a reusable method • Augment the decision making process

19. Conclusion Choosing the best vendor from a group of qualified service providers can be a daunting task. Determining specific requirements in advance and communicating factors for success with potential providers creates an equitable and decisive way to subjectively make a decision. By using the weighted matrix methodology you will be sure that all aspects of the request are covered and the groundwork for a successful comprehensive agreement between parties produces the desired results.

20. Vendor Selection • Questions? • Comments?

21. Contact Information Dana R. McCormick Wells Fargo Home Mortgage MAC X3800-011 8480 Stagecoach Circle Frederick, MD 21701 240-586-6351 Dana.R.McCormick@Wellsfargo.com