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Software Selection Guidelines for Systems - Oct 2000
| Automation |
Software Selection Guidelines for Systems
So you've decided to invest in new software for your business...enterprise software. It was inevitable.
There's a revolution going on in business and it's being driven by information technology. The internet has opened
the door for business models the would have been unthinkable a few years back. Even in the most traditional
industries, new tools are emerging that are reshaping the way companies do business with their customers and
suppliers. The terms of B2B and B2C and more new acronyms crop up almost daily. Fully integrated enterprise
systems allow your business to run much more efficiently and communicate more effectively with your clients and
customers and vendors, etc.
The pace of change is accelerating. Homegrown systems have become an endangered species as companies find
they can't hire programmers fast enough to keep them current. Even the leading ERP software packages have had
difficulty keeping pace with the nimble, new upstarts as an example.
With the technology becoming a key part of every business's competitive strategy, we are seeking more and more
buyers in an increasingly confused marketplace. Not only are they confused. They are intimidated by the horror
stories they have heard about a "never-ending" project that a company throws money into without achieving the
results anticipated.
So how do you sort through the noise and make the right decision? Not only in software, but in the implementation of
that software. Who can you turn to to "make sure" that the software, the implementors, and the on-going value of
the system are maintained when the implementors leave. And...did you really get what you needed? And...do you
really have what you need? Will it be there for you five years from now, working and functioning in line with your
expectations and those of your B2B and B2C players? Our team, The ROAD Group, LLC, has the ability to assist you
in your endeavors. From our collective experience (including our teaming partners: Grant Thornton, KPMG, Fluor
Daniel, CSSC) we have assembled the following tips to guide your foray into the software market and the enterprise
automation capability you need now and in the future.
Keep Your Eyes on the Prize
There's a reason that your business is considering an investment in new software. Clearly, you expect to realize a
strategic or operational return from your investment. Unfortunately, in the heat of the software sales cycle each
vendor attempts to shift the focus to his or her own product's latest features and world-beating technology. It is easy
to lose sight of the business objectives that started the process in the first place.
As you launch the team that will lead the selection effort, remember that you will be selecting a package that may be
in place for many years. Seek out the visionaries in your organization (starting with the CEO and including all the
other C-level executives as a minimum) and have them share their thoughts of where the company should be in five
to ten years. Have them consider the following questions:
How fast will you grow?
What is the unique competitive advantage that will fuel your growth?
How is eBusiness changing the rules in your industry?
Do you plan to make acquisitions?
Will you add new locations or business units?
Will you expand into new markets domestically or internationally?
Be sure that your Selection Team begins with a solid understanding of your business strategy, vision, and objectives
so that it will develop requirements that reflect the business you want to be. If you are having trouble developing
this vision, consider getting outside help to get you started on the right foot.
Select a Solution, Not Just Software
The market for business software has become increasingly confused. The leading eCommerce software vendors are
acquiring or partnering with other companies to round out their capabilities and offer features like content
management and auction capabilities. The traditional ERP vendors are broadening their footprints in an attempt to
offer an "end-to-end" solution with everything from web storefronts to customer relationship management (CRM) to
supply chain management (SCM). The CRM and SCM specialists are branching out into web order fulfillment. And a
number of "best-of-breed" technologies are offering impressive solutions targeted at specific market niches.
Underlying all of this is a network of partnerships and alliance agreements that formally and informally tie these
companies together.
So how do you sift through the noise and confusion of these alliances during the software selection? You should
develop system requirements based on YOUR business objectives and allow the competing vendors to assemble
complete solutions to those requirements, either on their own or through partnerships. Where a solution with multiple
components is likely, consider assigning or hiring someone to act as a "general contractor" (project direction and
management) and giving him or her the responsibility for coordinating and communicating with the various parties
that make up the complete solution. The challenge is to manage the integration points between the packages and to
ensure that the end result is an integrated solution that supports YOUR business objectives.
The key here is Master Planning, one of The ROAD Group's services, with a proven industry standard. The ROAD
Group uses PERA for master planning for systems which consist of physical, logical and people elements.
Put Decision-Making Authority in the Right Hands
Executed correctly, the selection process itself will build momentum for the changes to come. Your Selection Team
will develop a shared vision of how the business will operate with the new technology. Master Planning (using PERA -
The ROAD Group's standard) will address and catch the issues. Excitement will build as people see how the new tools
will make them more effective. Having had input into the decision, they will understand and support the selection of
the preferred software. The will feel ownership and will be committed to making it work.
Unfortunately, things don't always work that way. Most software vendor representatives are trained to bypass the
rigorous analysis of the Selection Team and sell directly to the top management of the company. "People buy from
people," they say - implying that the product capabilities are secondary.
Your challenge will be to keep the decision in the hands of the people that will make or break the success of the
project. Top management must safeguard the authority of the Selection Team by repelling any attempts software
sales representatives make at circumventing the established selection process. This policy will ensure a level playing
field for all software vendors and will empower your key decision makers by establishing and ensuring their
credibility and clout.
Set a Realistic Budget
Before you launch the Selection Team, be sure that you are ready for the price tag they will present to you at the
end of the process. The best software tools are expensive and the full cost of implementing them is not always
apparent. Don't focus on the license fees; they are often discounted and usually pale in comparison to the other
costs of implementing the solution, including:
Maintenance fees
Training costs
Implementation costs (both internal and external)
Hardware and other infrastructure costs
Be sure to consider the total cost of ownership (TCO) for the solutions you are considering. If you develop a TCO
model with a software vendor, you're likely to get only a subset of the overall costs. Instead, work with a trusted
business advisor to develop a list of ALL costs. Next balance these costs against the business benefits you plan to
achieve. Take this total value proposition to anyone in the organization whose buy-in must be secured before
investing the time and effort in a selection process.
An important and essential element to effectively accomplishing the above is to model your business processes. This
is the key in successful and effective implementation, understanding by all those effected, and gaining buy-in as the
Selection Team begins its processes of evaluation. You MUST do Master Planning and the first pass at your business
processes BEFORE you try to select and implement the software solution. The Business Process Engineering is
normally done by experienced management consultants. This should NOT be done by IT personnel. They do not
have the business knowledge and understanding. In addition, the business process modeling MUST be done
simultaneously to make sure that the business processes to be used can, in fact, be implemented. There may be a
desire or need to alter the business process to "best practise" or another variation that will effectively work with the
application. Business Process Modeling is another service offered by The ROAD Group. This helps both senior
management and the Selection Team understand the entire enterprise and how it works from a "systems" point of
view BEFORE choosing a software provider.
Manage the Selection Process by YOUR Rules
Software salespeople are highly trained professionals. They follow well-developed sales methodologies that are
designed to tilt the playing field in their direction at every turn. Some vendor tactics you can expect to encounter are:
Attempting to bypass the Selection Team by insisting that they have an opportunity to meet with your top executives
early in the process. (There is a very legitimate reason for this IF it is to establish that the CEO must be the
champion of an enterprise system effort, not the CFO or especially the CIO - they should be coordinating points, BUT
the CEO MUST be the one for continued support, managing expectations, and maintaining alignment on the project).
Providing their own list of "suggested requirements"
Cultivating sources within your organization that can feed them inside information
Attempting to exclude other competitors by suggesting an early "proof of concept" demo
The challenge for the Selection Team will be to ensure a fair and objective evaluation of the solutions under
consideration. Recognize that a horde of software vendors pursuing your company will quickly consume an incredible
amount of your time with visits, meetings, lunches, etc. Set the rules of engagement early in the process. Who will
be the contact point(s) for the vendors? When will you welcome a visit? Who will the vendors meet with and for what
purpose? Without firmly enforced rules, the selection process can easily get out of control, delaying the decision, and
potentially creating "analysis paralysis."
Be Careful What You Ask For
Defining system requirements is the most critical part of the software selection process. We often encounter
companies that have researched their software options for months, yet haven't been able to come to a consensus on
a solution. Why? Because they never came to a consensus on what they required in the first place. This is ONE of the
major reasons why Master Planning is critical PRIOR to selecting enterprise system software.
The reason for this is pretty obvious. Today's solutions are build to support business processes that cross
organizational boundaries. These organizations don't always agree on their needs and priorities. We have found that
the best way to get consensus is to get people from each organization or business unit together in a room to develop
a shared vision of how the integrated process will operate with the tools offered by the new technology. As they talk
about how to get from today's process to the one they envision for the future, they will identify the things that the
new technology must be able to support. These become YOUR requirements.
The challenge is to get everyone to agree. Each person and department will have their own agenda and may be
unwilling or unable to be creative in addressing entrenched policies and procedures. Also, many of these people will
not be aware of the latest technologies available to streamline the processes. A Skilled Facilitator (The ROAD
Group's Team has these facilitation skills) - whether internal or external - is essential to this process. Use an
individual who has demonstrated skill at getting group consensus and who understands the software market you are
exploring.
Focus on What's Really Important
In most companies, the requirements definition process will lead to a list of hundreds of requirements. In years past,
the accepted practice was to bundle these requirements into a Request for Proposal (RFP) and send it off to the
vendors so that they could check "YES," "NO," or "MAYBE" next to each one. Unfortunately, what comes back is
neither accurate nor helpful. Software vendors merely respond in a way that maximizes their likelihood of getting
invited to the next round.
There's a better way to narrow the field. Since the vast majority of your requirements will be easily met by the
better software vendors, focus, instead, on a few differentiating requirements. These differentiating requirements
are the ones that are strategically or operationally critical for YOUR business and, as a result, difficult for most
software vendors to satisfy.
For these few differentiating requirements (never more than 20 to 25), ask the candidates to describe how their
solutions will satisfy those business issues. These narrative answers will quickly differentiate the contenders from the
pretenders. The tough part, of course, is identifying those differentiating requirements. That is best done with the
help of someone who has both an in-depth understanding of your business issues (an obvious result if Master
Planning and Business Process Modeling has taken place beforehand) and the capabilities of the available solutions
on the market.
The Demo - Have it Your Way
Its during the demo that the rubber meets the road. The demo is your opportunity to see how the proposed software
solutions will satisfy YOUR business objectives. Therefore, it is critically important that you, NOT the software
vendor, set the agenda. Each vendor has a "canned" demo and, left to their own devices, that is what you will see.
In that demo, everything works and the best features of that system are showcased. Unfortunately, you may not get
to see how the package will work for you.
Develop a script for the demo that reflects your own needs and mirror a "day in the life" of YOUR future business
processes (which means YOU MUST understand them to enable you to do it). Then make sure the script is followed.
In our experience, this is easier said than done. We've never seen a vendor not try to steer the demo back to his or
her own agenda. This if often done so skillfully that you may not even be aware that it is happening. Worse yet, your
own people will complicate matters by asking questions that aren't related to the script.
It takes a firm hand to control both the vendors and your own people. Sometimes an outside facilitator is the best
way to ensure that the demo includes ALL of the features that you need to see in the limited time you have available.
Beware of "Vaporware"
Nowhere are product life cycles shorter than in the software business. New technologies and applications are
announced every day. However, the announcement of a solution doesn't necessarily mean that it ready to ship.
There is a tendency in the software business to sell solutions before they are ready (normally thrust into this by the
"first to market" driver). This situation creates a real dilemma for the buyer. One the one hand, you don't want to
buy a solution only to find out that an important piece of it doesn't work. On the other hand, you don't want to ignore
promising new features under development, particularly if months will pass before you implement that part of the
solution anyway.
Use the demos to expose "vaporware." Watch out for "chalk talk" where the demonstrator draws diagrams on the
board and talks through how the system "could" work, without ever showing it on the screen. Take the attitude of
"unless I see it, it doesn't exist." Be from Missouri - the "show me" state. Make sure that you leave the demo
understanding what's there - and what isn't - so that you can separate promises from reality. The input you receive
from people with "real world" experience in each package is incredibly valuable at this stage in the process.
The Decision is Yours
Once the demos are done and the analysis is complete, it's time to make the final selection decision. Inevitably,
individual departments or groups will have different favorites, depending on how each solution addresses their own
needs. The challenge will be to get the group to agree on which solution best meets the needs of the organization as
a whole. A consensus decision will build momentum for the implementation project to come.
In order to reach a consensus, assemble the members of the Selection Team and begin by reviewing the facts of the
case.
What are the strengths and weaknesses of each solution?
Are there technical issues based on a package's architecture or level of integration between the solutions?
How financially stable are the vendors?
What have you learned from the references?
What will be the total cost of ownership for each solution?
As the Selection Team members begin to see the whole picture, the focus will shift away from what is best for
individual departments to what is best for the company. The challenge is to move the Selection Team towards a
solid, well-supported business case justifying the consensus decision.
Everything is Negotiable
Once you've got a consensus decision, you move into the negotiation phase. Keep in mind that the variable cost for
a software vendor to provide the software for your new business system is roughly the cost to burn and ship the
CDs. Of course, the software vendor wants a little more that that to cover the massive fixed costs for development,
sales, and support. The difference between two amounts is your negotiating space.
First, be sure that you are getting a quote that includes ALL of the costs you will incur including licenses,
maintenance, training, and any implementation and support costs. Secondly, be sure that the quote covers ALL of
the elements of the solution including any third-party packages and development tools, especially the one that
provide your eCommerce solutions. A good rule of thumb is that if the software vendor shows it, then it must be
included in the quote.
Next, when you have the initial quote, devise your negotiating strategy. Determine a strategy, set some goals (for
price, added modules of functionality, free training, etc.), and devise the tactics you will use to get what you want. If
you are not experienced in negotiating for software, consider using outside help. We often find that the savings you
gain in bottom line prince can easily offset the cost of hiring a consultant to help you with negotiations.
Know When to Get Help
Ultimately, the selection of a new business software solution is all about managing risk. The trade journals are full of
stories of software implementations gone bad. These fiascos generally stem from a few main causes:
The organization never bought into the new solution
The project team set expectations that couldn't be met
The solution didn't work as the vendor had promised
The goal shifted from one of "Improve the Business" to "Go Live"
Our last tip is a simple one - know when to get help. As with everything in life, wisdom comes from experience. If
you do not have experience in selecting software, you would benefit from hiring an "experienced guide." The risk of
failure is great. And the value in starting off on the right foot is immense. If you are still not sure whether or not to
seek outside help with your software selection project, consider taking the Self Assessment Questionnaire below:
Self Assessment Questionnaire
If you answer "NO" to any of the following questions, you could benefit from the experience and success that The
ROAD Group Team has achieved in helping companies in a wide variety of industries select and implement
enterprise system software solutions. To learn more about how our Team can help you, call us at 281-263-3798
today or e-mail us.
Do you have a clearly defined business strategy and vision, and does your Selection Team understand it?
Does your Selection Team understand how this software implementation will support that vision?
Do you understand the software market you are evaluating - the key vendors, their strengths and weaknesses, their
reputation, and their development plans?
Do you have enough experience in the software packages you are evaluating to determine what is "vaporware" and
what is not?
Do you understand which of your business requirements will help you differentiate between the vendors?
Do you have a skilled facilitator who can achieve consensus from a room of differing opinions?
Do you know which items a software vendor is most likely to negotiate and which they will not?
Other Issues of Importance
There is more to a new enterprise software solution than the selection and implementation. How do you keep it
maintained? NO, we are NOT talking about software vendors providing maintenance...that is maintenance of their
software codes, etc. dealing strictly with the software, upgrades, and the like. We are talking about the "business
processes change maintenance management" required for your system software to enable it to work as you change
your organization and business practices from time to time. Software vendors ARE NOT there for that. So...who is?
Enterprise systems applications, such as SAP R/3, work in an environment of client-server. This requires business
processes that can be well understood by the system. This, in turn, requires business process modeling with
modeling tools designed to enable the system software to understand and handle the relationships - organization and
data knowledge. You can only get there with the tools that allow you to "model and test" changes BEFORE you
implement them into your system. IF you don't, the system will not continue to function in support of your changed
business environment because the system and the software cannot learn by osmosis. Someone has to maintain the
system software application by re-modeling the modeling used to establish the system in the first place. This was the
system as it was delivered and accepted by you at a very definitive point in time. The ROAD Group uses ARIS, the
leading business process modeling tool, for not only modeling for system planning and implementation, but system
business process maintenance too. This tool is a proven key to effectively working with major enterprise systems,
and maintaining those systems long after the "implementors" have left the scene.
Business Process Modeling Maintenance Services for Enterprise Systems is a service provided by The ROAD Group,
LLC. We not only model the processes for system planning and implementation, but offer post-implementation
services utilizing the best tool to keep your system in tune with the changes that will happen. This permits you to
make sure that you always have a system that reflects your latest organization and your latest business processes
and needs. Our experienced business process system modelers are constantly kept up to date with the latest
revisions and improvements in the ARIS modeling tools and applications.
Another value-added service for ensuring you are getting the software you bought and that it performs within the
specifications is the Validation Services. The ROAD Group's sister company (CSSC, Inc. - Computer Systems
Services and Consulting) provides software quality assurance and validation services as an independent service and
consulting firm). CSSC's experienced enterprise system software validation and quality assurance team have
in-depth experience in the pharmaceutical industry and familiarization with the various CFRs (Code of Federal
Regulations) required. CSSC excels in compliance testing and validation as a third-party independent entity.
Put the "Framework" Around Your Enterprise System Project for Successful Results The ROAD Group's enterprise
systems services offered noted in RED
CSSC's software validation & QA services offered noted in BLUE
Framework for Successful Enterprise Systems 1. TRG offers Master Planning
2. Business Process Modeling
(TRG offers Planning support)
4. Business Process Modeling
(TRG offers Negotiation support)
6. Business Process Modeling
(TRG offers Implementation support)
3. Enterprise System Planning & Selection
(TRG offers Facilitation)
5. Enterprise Implementation Activities
(TRG offers Project Management)
7. CSSC offers S/W QA
& Validation Services
8. TRG offers Business Process Modeling
& Testing Support and Implementation for
YOUR Enterprise System Maintenance by
maintaining business process usefulness.
To learn more about how our The ROAD Group Team can help you,
call us at 281-263-3798 today or e-mail (Paul.Allen@theROADgroup.com)
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