March 2003

2003 DISTRIBUTION SOLUTIONS GUIDE    NEWSLETTER HOME

The Software Selection Process

by Steve Epner

For many businesses the “pull a rabbit out of a hat” method for evaluating software seems easy.  Borrowing from “Alice In Wonderland,” if you do not know what you want, it does not much matter what you pick, does it? Doing it right – the first time – is not difficult, but will take time and effort.

The Paper Chase

Before you even start the selection, trace every piece of paper, form or report that flows through your operation.  Paper tells us what was or is important.  We may not use all of the information on the paper, but everything we use is written down somewhere. 

Make a list of the procedures that are necessary to do each person’s job.  This will be the start of a “requirements” document that will be used to compare different application programs.

Do not just document the paper flow, but look at it carefully.  Review every step, ask: “how does this add value to my customer?”  In many cases, organizations can eliminate steps and improve their workflow even before a new or upgraded technology solution is installed.

Brainstorming Your Wish List

Next, it is time for a “Blue Sky” meeting.  These can be great fun.  Pull the team together and have an off-site meeting where you can dream about the future.  For a short period, leave behind real world concerns of cost, time, technology and personnel; do not let anything stop the creative juices. 

Work as a team to develop innovative approaches that can improve your business. Some ideas may be available for little or no incremental cost.  However, if no one suggests them, they may be accidentally eliminated from future use.

Take all of the required existing procedures and new ideas and prioritize these into three groups:

• Absolute - if they are not in the solution, the solution will not work.

• Wanted.

• Wish List.

These become your “system requirements.”  This “shopping list” can be given to the various vendors.  They can then propose ways to get you from where you are to where you want to be.

Without a detailed list, the salespeople will show you only what they do best.  Each will have the perfect solution for your needs without having to ask what they are.  Have each vendor respond to your list of requirements.  In this way, you can learn about each system and can compare them to each other.

  Do Your Homework

This is the perfect time to consult the Distributor Software Guide.  It is crucial to remember every software solution can be successful in the appropriate environment.  It is also true that every software solution can fail if used for the wrong purpose, if the staff wants it to fail; or, if the system’s personality does not match that of the organization it is to serve.

Utilize the online resources and scorecard at www.software4distributors.com and remember, it is difficult to differentiate between more than four packages at the same time.  Given “close fits,” commit your time and resources to evaluate the nuances that will allow one of them to serve you better than the others.

Time To See The Software In Action

Every vendor will want to show you a “demo.”  Be careful.  Demonstrations are carefully constructed to WOW you.  They use limited amounts of perfect data.  The sales speech covers any delays and makes the data entry seem effortless.  You need to see how the system works.  You should prepare a list of features you want to see using your data if possible.  Before meeting with any vendor know:

• Your key areas of concern.

• Your mission critical processes that must be demonstrated.

• The volume of transactions to be handled.

When visiting or calling a reference, be prepared.  Do not just ask: “do you like the system?” or “does the system work?”  Understand that the vendor is not stupid; they will not send you to a bad reference.

Get the real scoop by asking: “If you had it to do over, what would you do differently?”  “Did the system implementation happen on time and within budget?”  “Were there any surprises during the start up?”  These will allow the businesses you talk with to be a great reference and still provide valuable input to the decision making process.

Making The Decision

The decision making process is the key.  If a small group – such as the information system department, or just the president chooses the system and it fails, it is their fault.  If a team of people is involved, it becomes a group decision and the group owns it.  They will work hard to prove they were right.

Finally, top management must support and make a commitment to the change or the system will fail.  Make sure the owners and/or directors are in favor of the project and understand the challenges it will cause.  Keep them up to date on the process and solicit their input.

If the owners are concerned about the cost, help them recognize that software is not just a depreciating asset.  They cannot compare the cost of software to things they understand better, like delivery trucks and inventory.  Consider software as an operating expense.  $100,000 will cost about $2,000 per month on a 60-month lease.  In most parts of the country, this is less than the fully loaded cost of a good clerical person.  Therefore, if a system will eliminate the need to hire one new clerk, $100,000 can be justified.  Treat the system as a payroll cost and most executives will understand.

Negotiation

The last step in selection is negotiation.  Some people look forward to doing battle with the vendor.  Keep in mind; the people you are negotiating with (against) are the very people who will be responsible for your success.  This must be a win/win situation.

 If you get the lowest possible price, good business sense says it has to come from somewhere.  If training and support have been shortchanged -- a common place to cut costs -- then you may never get the system operational.  If you caught the vendor at a vulnerable time, when a better contract comes along, guess who will get the attention.

There are discounts available for most systems.  A good vendor will wait until there is a deal before giving the last dollar.  We often tell the selected vendor that the contract is theirs to lose.  Then work with them as a partner to put together a deal that serves the best interests of both parties.

Ongoing Evaluation

Even if you are not interested in changing systems, the process described can help your organization.  Perhaps you will discover options you may not be using.  Annually create a list of the features and functions you need to operate the business. Talk to your vendor to see if they are available.  Work with the vendor to see if they can be added.  Remember there is no such thing as an easy conversion.

One last comment, the world of computers and the world of business are in a constant state of flux.  If you undertake a selection project, make your decision within six months of starting.  Any longer and the answer may change.  Systems are normally enhanced every year.  Hardware changes every six months.  Business requirements can change monthly.  The answer is a moving target.  To hit it, you have to fire before it is out of range

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Steve Epner has been directing traffic on the information super highway since 1966.  A highly regarded industry expert, Epner is widely published and has provided comment for national business publications including the Wall Street Journal.  His experience in business, technology and strategic planning makes him one of the nation’s most sought after technical speakers.  Epner can be reached at sepner@bswc.com.

St. Louis based BSW Consulting, founded in 1972, is a national technology consulting company bringing business and technology together.  For more information visit www.bswc.com.