| If you are like most small business owners, you don't | | | | proposal (RFP) and an evaluation framework. The |
| view yourself as a software technology expert. In fact, | | | | RFP will take the form of a Microsoft Word ® |
| you probably approach new information technology | | | | document of questions that can be sent to software |
| (IT) projects with trepidation and hand it off to the | | | | vendors for their response. It should cover all of the |
| back-office staff or third-party consultants. This is an | | | | features and functions identified as critical during the |
| understandable and healthy fear given that the | | | | process mapping stage. It should also cover technical |
| majority of software projects fail. | | | | requirements, such as which databases and operating |
| This is also one of the reasons why small and medium | | | | systems are supported, or if the software is offered |
| size businesses lag behind large companies in | | | | as "Software as a Service" such that it is hosted by |
| software technology adoption. While the largest | | | | the vendor and accessed over the Internet through a |
| manufacturers, retailers, and financial services firms | | | | web browser. |
| charge into the 21st century with optimized supply | | | | An evaluation framework is a spreadsheet in which |
| chains and web-based customer management | | | | you track each product's capabilities relative to your list |
| applications, too many small or mid-size businesses are | | | | of requirements. Typically this would consist of a |
| still struggling with inefficient, paper-based business | | | | Microsoft Excel ® spreadsheet with all of your |
| processes. | | | | requirements listed in rows down the left side and |
| The good news is that you probably already have the | | | | each of your short list vendors represented by a |
| experience you need to change your company's | | | | different column. |
| success with IT; the same skills that make you a good | | | | 7. Develop a Short List of Products. Next you should |
| manager generally can be applied to software | | | | create a "short list" of software products -three to five |
| selection. Selecting software requires a detailed plan, | | | | products that meet your high-level requirements. If your |
| an accurate budget and meticulous project | | | | short list grows beyond five vendors, you will not likely |
| management. Get over your fear of technology and | | | | be able to evaluate each in sufficient detail. If the |
| you can be on your way to the first of many | | | | shortlist is less that three, you are probably overlooking |
| successful IT projects. | | | | a few good products. To build a shortlist, start with a |
| | | | longer list of products assembled from numerous |
| Why So Many Software Projects Fail | | | | sources, such as: industry trade magazines, especially |
| There are many reasons why IT projects fail, but | | | | annual tech issues; trade shows and conventions; and, |
| we've isolated what we believe are the top five: | | | | recommendations from peers or advisors (e.g. CPAs). |
| - Limited budgeting and planning; | | | | Filter the list down to three to five products based on |
| - The wrong team for the job; | | | | questions such as: |
| - Poor requirements planning; | | | | - Does the company serve your specific industry? |
| - Lack of a rigorous selection process; and, | | | | - Do they serve your size of business? |
| - Weak change management or training. | | | | - Do they present a professional image (e.g. quality |
| Ten Steps to Successful Software Selection | | | | website)? |
| Now that we have identified the leading reasons for IT | | | | - Do they meet your technology requirements (e.g. |
| project failure, we will outline in ten clear steps how | | | | database)? |
| construction companies can manage an efficient | | | | 8. Evaluate Short List Products. The next step in the |
| selection process that ensures success. | | | | process is to evaluate your shortlist of products to |
| 1. Assemble the Right Team. Start with identifying an | | | | choose a single "winner" and a contingency "runner-up" |
| executive-level project sponsor who will ensure the | | | | in case reference checks or negotiations don't go well |
| project gets the right funding and attention throughout | | | | with the first vendor. Start by sending each vendor a |
| the organization. Next, you'll need a project manager | | | | copy of your RFP and ask them to complete it. |
| who will oversee all details of the project from start to | | | | Concurrently, begin collecting information from each |
| finish. If you have an IT staff, they obviously have an | | | | vendor such as brochures, papers, trial versions of |
| important role to play in the process, but don't let your | | | | their software and demonstrations. As you review this |
| software decision become exclusively | | | | information, use your evaluation framework to track |
| technology-focused. Finally, you'll need to identify | | | | how well each vendor's products match your |
| end-users that will enthusiastically contribute their | | | | requirements. |
| requirements and ideas for improving processes. | | | | After completing all of the demonstrations and |
| 2. Establish Clear Goals for the Project. Once the | | | | reviewing the RFP responses and product literature, it |
| team is selected and assembled, a good first step is to | | | | is time to review the evaluation framework in detail |
| outline the goals of the project. These goals will justify | | | | and rank each product. Using the feature-by-feature |
| the project expense and guide the team as difficult | | | | scores you entered for each product and the |
| decisions arise. All choices during the project should be | | | | weightings you assigned to each requirement, rule out |
| weighed according to how well they help achieve | | | | any product that falls short of your most critical |
| goals such as: "close the books faster and more | | | | requirements. Then prioritize the others according to |
| frequently;" "improve my sales processes and pipeline | | | | their performance across all of your important |
| tracking;" or, "provide more efficient customer service." | | | | requirements. Finally, select one vendor that you feel is |
| 3. Build a Detailed Project Schedule. The next step is | | | | best, as well as a runner-up. |
| to create a project schedule that outlines all the major | | | | 9. Check Customer References. It is critical at this point |
| activities and their sub-tasks. You should consider each | | | | that you do your "due diligence" by checking the |
| activity's various dependencies and resource | | | | winning vendor's customer references. Moreover, you |
| requirements. Be sure to assign an owner to each | | | | need to "play detective" and dig into these references. |
| activity and even to each task. The project schedule | | | | Keep in mind that the references to which a vendor |
| itself can be as simple as an Excel spreadsheet to | | | | refers you are most likely their happiest customers. To |
| track the various tasks or as sophisticated as using | | | | offset such "cherry picking," require at least three |
| project management software to manage the project | | | | customer references and prepare a detailed list of |
| with Gantt charts and a Critical Path Method network | | | | questions that require specific answers rather than |
| diagram. | | | | broad, positive generalities. Even better, try to locate |
| 4. Create a Budget for the Project. An otherwise | | | | your own customer references by networking with |
| successful software project could be considered a | | | | industry peers, attending trade shows or user groups |
| failure if it comes in over budget. That's why it is critical | | | | and talking to your industry association. |
| to have an accurate budget to work against. The | | | | 10. Negotiate the Deal. The final step in your selection |
| biggest budgeting problems occur when the project | | | | process is negotiating the right deal. Don't stop being |
| team fails to account for costs outside of the | | | | diligent just because the finish line is insight. This step of |
| software itself, such as: new computer hardware | | | | the process will determine the price you pay for the |
| required to run the software; platform software | | | | software, the level of service you receive and the |
| requirements such as a new database; or, consultants | | | | recourse you have if things go wrong. Key areas to |
| to help install and customize the software. | | | | consider in the negotiation include: what type of license |
| 5. Define Your Requirements. The next step is | | | | does the vendor offer; how is the software priced; |
| perhaps the most important in the entire process: | | | | what are the maintenance and customer support |
| defining the functional and technical requirements you | | | | policies; and, what are your rights to new versions of |
| have for the new system. As software selection | | | | the software and periodic upgrades. Keep in mind that |
| practices have evolved, requirement planning has | | | | for medium to large size deals, there is typically room |
| shifted from simply a list of features - often influenced | | | | to negotiate with the vendor on all of these points. The |
| by software vendor marketing - to a more deliberate, | | | | larger the check you are asked to write, the more |
| thoughtful analysis of "current" versus "optimal" | | | | room for negotiation. |
| business processes. This requires that the project | | | | Software selection is not easy and should never be |
| team maps out existing business processes (perhaps | | | | considered a second tier project. The right software, |
| using a flow chart diagram) and then considers how | | | | implemented properly, can have a major positive |
| each could be improved. | | | | effect on your business. Follow these guidelines and |
| 6. Draft a Request for Proposal (RFP) and Evaluation | | | | you are on your way to IT project success. |
| Framework. Now it's time to draft a request for | | | | |