Selecting the right software for your business is often the most problematic part of the process. Many companies rush to enter into dialogue with vendors before they have adequately determined what they want from a system. You must take some time out to thoroughly grasp your business and understand it inside out. Otherwise, how will you learn what it needs to survive and thrive? Therefore having a structured approach to the selection process is vital to ensure you find a software package which matches your business needs while allowing enough time to get the job done right.
What is a Statement of Requirement Document?
The first step to selection is to establish that you indeed require a new software package. Audit the processes within your business to determine what you want from an application, but also why you need one. Is there a need? We run information gathering sessions within organisations to demonstrate the issues caused by existing business processes. This process paints a realistic picture of what organisational life could be like with a new system, and what problems new software can resolve. It may become apparent at this stage that what you need is a software version upgrade and not a new software package.
Our advice when selecting software – always start by justifying reasons for the project within your business case, ensuring they align to your strategic objectives. Then analyse what you currently do and what business processes need to improve to meet those objectives. You will find later down the line that it comes in handy referring back to the original document. It is a framework for delivery and performance monitoring of the project and will continually instil the reasons why you initially chose the software.
Once you pull all the process and system requirements into a document, it’s time to send to the vendors. Depending on the complexity of the business, don’t be surprised if the report is 20-30 pages long. The document should avoid questions that require a simple yes / no answer. Vendors are aware that to be in the running, they will have to explain how the ERP software will benefit your business. So, the more detailed your report, the more the vendor will know about your business processes and the better chance you have of finding a match.
Questions to Ask Before Buying Software
Spend some time researching the ERP systems market place, perhaps by visiting websites, attending some exhibitions and starting those initial conversations. Look for vendors who not only specialise in your industry sector but deal with companies on your scale of operation; this will give you a good idea on what to expect if you chose to work with them.
In creating the statement of requirements document, you will already have the buy-in from the top for the project. What you must not forget is to ensure you get the approval of a high-level budget. The budget doesn’t need to be too accurate at this stage. However, consider hardware and network costs as well as software and services (e.g. training and consultancy). If you have asked the right questions during your research, you will have a good idea on market pricing and other eventualities — the costs involved with a project running over, for example.
Issue the completed Statement of Requirements document to a list of between four and eight vendors. When the vendors respond, the whole selection committee should spend time to review the responses critically. A right answer should be a detailed document in which the vendor explains how its system will overcome your issues. Following the review, select a few vendors to follow up in more detail.
What Makes a Good Software Demo?
The next part of the process involves demonstrations by several vendors. Research suggests that a software demo should take 15 minutes. Not valid in the realm of ERP! The vendor should want to show real-life scenarios playing out and also give you the best immediate impression of the look and feel of various options. So, you should expect a demo to last either half a day to one full day. However, some vendors may suggest spanning the sessions over several days.
Once you have chosen the two or three vendors you want to see; the next step is to decide what you wish to demonstrate. You can’t possibly see everything in the software in a day or half-day demonstration, so be selective. Ask the vendor to show the activities that:
- Are critical to your business.
- Will improve your business and its process management flow.
Input your expectations for the software demonstration on a report and send the same report to each of the vendors. Posting the same requirements will enable you to make a good comparison. Also make sure you schedule a time to view their offices, meet some of the employees and see the support desk. At this stage of the selection process, most software performs well. Often the choice between vendors comes down to which vendor suits your business best. This decision may be more about organisational cultures than software. Although it is important to take detailed notes in the demonstrations and be it may that you score each vendor between 1 and 10, recognise that ‘people buy from people’.
Once you have your preferred vendor, arrange for a two to a three-day workshop with the software at your premises. Arrange for as many of your end-users as possible to view the system as this will increase buy-in and the likelihood of a successful software selection project, from the start. It will also act as a good starting point for future implementations and provide experience in spotting any functionality gaps you missed.
The Final Step
Providing your users are happy; then the final step is to negotiate contracts. Some people feel more comfortable than others when consulting agreements; in all cases, make sure the negotiations are polite and fair. For example, don’t consider playing one vendor against another. You have a long term relationship to build, and in the long run, it won’t do you any favours. At the same time, don’t be afraid to negotiate; all vendors can move a little.
At Gradient, we can support you in selecting the vendors that best meet your requirements. We will help you put together a comprehensive specification document detailing all critical requirements linked to your strategic objectives. We do this while ensuring that your internal people have ownership of the decision.
Let’s have a chat about working together on your next project. Call us today on +44 (0) 1282 463710.
Author’s Note: This post was originally published in April 2018 and has been revamped and updated for accuracy and comprehensiveness.