Reinventing Standard Practices: Software Selection

Enterprise software solutions come with a high price tag. Depending on your business's size, the cost for a software solution can range from $10,000 to $1.5 million. This is always a substantial investment, and like any investment, it carries various potential risks. We accept these risks because the potential benefits of these tools, as with any investment, outweigh the associated risks. However, businesses often assume much more unnecessary risk due to immature IT standard practices.

In the broader context, the field of Information Technology Consulting remains relatively young and, in many respects, underdeveloped in terms of business practices. When compared to well-established industries like real estate, law, or accounting there is a notable difference in how risk is assessed and managed. Consider the example of purchasing a house: even the most seasoned homebuyer will seek the assistance of a realtor during the transaction. Realtors know the right questions to ask, identify potential red flags, and advise on fair pricing. You rely on their expertise to understand the market and assess risks, guiding you in making informed decisions before committing to a significant investment. Additionally, all of these practices are regulated and there are ways to establish trust that simply don't exist in the consulting world. So how do you protect your business and not make the wrong investment when implementing a new digital solution?

To better answer that question we need to first look at what is standard practice when it comes to selecting enterprise software. If you've gone through this process you might be familiar with a Request for Proposal or RFP. This formal solicitation document lets vendors know that you are looking for a solution, what the requirements are, and how the proposal will be evaluated. It will also include guidelines and submission criteria that you will need to make the decision. From here, the proposals are evaluated and a vendor is selected. Simple enough - so what's the issue?

Generally when running into issues on projects they always seem to center around the same thing: Scoping. Scope, if you are not familiar, is what a contract or agreement details as far as what is included as part of the software or corresponding implementation services. Enterprise solutions are complex tools that require a good degree of tailoring to fit the needs of your business and often have features that can be configured or omitted depending on your requirements. Budget estimates around implementation are built entirely on what features are in scope and the understood complexity of the tailoring and configuration needed to meet the requirements. When projects get out of control from a budget or timeline perspective or fail altogether, more often than not it is because at somepoint there was a failure to accurately scope the solution. This generally happens at two points in the process; pre-RFP and the Evaluation step. While this can happen during the implementation as well, due to scope creep or unforeseen changes, many times these issues can still be traced back to a miss somewhere in the RFP process.

When evaluating requirements in the drafting of the RFP there are a few things to consider:

• Do you have an accurate and detailed understanding of your end user process?

• Do you have reasonable expectations for what a software solution will handle?

• Are you consulting the business users who will most often be using the tool?

• Are you consulting your IT teams about your digital infrastructure and how this tool will be supported?

• How will this fit into your company's software ecosystem? Will it need to integrate with other enterprise software?

• What's your overall technology roadmap and how will this solution fit into this process?

The answers to these questions will help make sure that the requirements you build are taking not just the technical details into consideration, but the overall vision for building a healthy digital ecosystem. Each of these questions will need to be explored in detail and it's critical that the team drafting your RFP is not just digging for the answers but also capturing them accurately and clearly so that there can be no misunderstanding with vendors responding with solutions.

The second common point of failure is during the evaluation step. When looking at proposals it's important to not just look at what the proposal contains, but what it doesn't. This might seem obvious but you might be surprised at how often something is missed due to assumptions or oversight. The cost of this is usually a change order to add additional scope and budget. Finding what's missing also goes beyond a simple gap analysis between your requirements and the proposed solution. A vendor who says that their solution can be configured to meet all of your requirements might not disclose that to do so might require heavy configuration or even customization of their software. Often these solutions will have an ongoing cost of maintaining these custom solutions that will not be part of your initial costs and estimates.

So back to our question, how do you protect your business and make the right choice? There are several different options depending on your organization and the resources you have available:

The Insider - Is there someone within your organization that is familiar with implementing something similar? This goes beyond someone who just experienced the implementation but someone who was part of the decision making process and has a deep understanding of what the implementation process entails. Does this person have the bandwidth to take an active role in gathering the necessary information for your RFP and evaluating the submitted proposals? If so you are in a rare position of being able to use existing resources to make the decision. The key here, listen to your insider and give appropriate value to their knowledge and experience.

The Researcher - Let me start by saying that I would be very cautious about this option. It's possible that if someone has a well grounded understanding of software and your business processes they might be able to spend time heavily researching the options available and familiarizing themselves with the different vendors. If you have tight budget constraints you might feel like this is your only option. However, the time and effort this will take might offset any savings. This also puts a lot of preassure on the individual(s) selected for this task and a heavy reliance on the information publicly available. At the end of the day, there is no substitution for experience.

The Expert - In software consulting there are any number of people with both the knowledge and experience to help you make these decisions. While this option often requires an investment, generally identifying potential gaps and flagging issues early will more often than not save you in the long run. This option isn't without its own risks. As stated above, consulting isn't a widely regulated field. More than most other businesses, you rely on reputation and trust. Despite this risk, the potential benefit an expert can provide for not just cost savings but helping to implement a solution your end users will actually use can be invaluable.

At the end of the day, your business is making a significant investment. As with any significant investment, make sure you are taking the steps to make the most informed decision. A good enterprise tool should bring clear value, help your end users do their job, and provide leadership with the valuable insight they need. If you aren't accomplishing this, what are you paying for?