Choosing the Right Software Vendor (part 2)


Our last post discussed the top three criteria for choosing a software vendor:

  • Vendor Stability
  • References
  • Software Upgrades and Version Release

This installment will address crucial aspects of the actual anticipated working relationship you will potentially have with each vendor and covers:

  • Maintenance and Support
  • Implementation
  • Training
  • Working Demo

Maintenance and support                                                         

With any complex software that is upgraded on a regular basis you can expect occasional problems or issues to crop up. The important thing to look for is a system in place to address these eventualities. This is something that can vary widely by reseller and by manufacturer, and one size does not fit all.

  • What are the support terms?
  • Are different levels of support available?
  • What are the escalation procedures?
  • Is there a guaranteed response time (even if only to say that they are still working on the issue)?
  • Are upgrades/service packs released on a regular basis?
  • Is there a toll-free line, Web support or e-mail support?
  • Can you track progress of your support ticket or call on the Internet?
  • Who from your team is allowed to contact technical support?

Terms and cost of support will vary. Many will charge an annual maintenance fee which is often calculated from a percentage of your software’s price, to provide basic level support and upgrades. Most will charge an additional fee per ticket item or service related issue, or you may have to pre-pay for a set number of service tickets or hours spent providing support. Just as all support plans are different, so too support services may come in all flavors and colors. Make sure you understand what kind of support is available so that there are no unpleasant surprises down the line. Also, while some resellers and/or vendors may only support their own product, others may have support teams who are able to assist in areas that may be underlying to their solution such as database management. If not, make sure that you find someone that can support those systems so that in the event of an emergency you don’t have to start doing your homework while in crisis mode.


It’s crucial that any potential vendor takes the time to understand your needs and how you work as a company. Be wary of vendors that agree to show you their solution without first asking you some in-depth questions about what you are looking for in a solution and what key issues you are hoping the system will address. That being said, if a vendor has experience with other companies in your space, you may learn from their experience and discover new and better ways to do things so move forward with an open mind.

Ask about the vendor’s implementation methodology. Are they able to customize the software or processes as required? Are the costs of training rolled into implementation? For example while doing some initial data conversion to the new system, perhaps in the process the consultant will show key member of your team how to it for different areas or in the future. Find out in advance what is included in the implementation and rough estimates on how long each item will take. Does the vendor help you set up business rules? Are SOP (Standard Operating Procedures) included? The idea is to uncover as much information as possible and to commit the vendor or reseller (and yourselves) to a plan in writing. This will help all concerned stay on track, on schedule and within budget.

Following are example of some of the items that may be included in an implementation checklist:

  • Business/system analysis
  • Project management services
  • Installation
  • Customizations
  • Setting up reports and business rules
  • Data conversion/migration into the new system
  • Training


The vendor should have a clear plan for training your team on the system. Although many businesses prefer having the training done on-site, that is not always possible or cost effective. Optimally, the vendor will have different options which you can choose from including user documentation either built into the system, file based or a combination of both. Do not expect printed manuals as many vendors now leave the decision to print to the customer and provide PDF files or even word files that companies can edit to suit their particular needs. Ask to see samples of the documentation. Verify if some basic training is included in the implementation plan. Set out clear goals for training that is arranged either on-site or remotely. Web-based training can also be effective, if done properly. Find out what topics are covered in each session, where and how the training is done, who is trained, how long it takes. Another thing to look for is a demo company or database set up within the software itself. A demo company is one that includes dummy data that users can manipulate without affecting the “real” or production data. The advantage of having a demo company is that it allows users to become familiar with the software without having to use real data. Consider the option of training managers or “key users” of the system only, who will then be available to train other members of your team in house thus reducing training costs overall.

Be prepared to factor some level of training into your overall budget. This will ease users into using a new system and hopefully foster ownership of the tasks that will be performing in the system.

Working Demo

Some vendors will present beautiful PowerPoint presentations showing you corporate information and often screen shots of the software tailored to what you, the prospect, wants to see. This is not enough. Some vendors will have a demo environment that they will allow you to access so that you can poke around and get a feel for the software. As the software is new to you, the demo might not have all the features available and even if it did you might not know where to look, this isn’t enough. Some will show you a demo of their system, showing you the bits and pieces that they want to show. This isn’t enough either. Indicate to the vendor what your specific needs are and insist that they show you at least some of the functionality working on their application. The data doesn’t have to be specific to your company, and they don’t need to show you every single field that you may require in a particular form, but they should be able to walk you through some of your key functions all the way to the level of reports generated or how the information will look on the dashboard with sample data.  This is a good indication that the software can, perhaps with tweaking, address your business needs, and that the sales people know and understand what they are selling and aren’t spinning stories of what their software can and cannot do.

In conclusion, with so many issues to consider, choosing a software vendor should be done carefully and thoroughly. However, if you use the above checklist and do the due diligence, you should be able to make an informed decision and choose the best partner to help meet your business needs.


Choosing the Right Software Vendor (part 1)


Whenever you purchase software used to manage a significant part of your business operations, in the software vendor you are also choosing what will hopefully be a long-term partner for your business. Selecting the appropriate vendor is just as important as selecting the right software with the right features at the right price. Just as you may have a checklist in selecting the software such as particular functionality and pricing, when considering vendors it’s helpful to have a checklist of criteria as well. If you don’t do proper due diligence, you may be committing your company to an unstable relationship.

The full list will be presented here, but part two of this post will delve a bit deeper into the last 4 criteria recommended for evaluating a software vendor.

Here are some things to consider:

  • Vendor Stability
  • References
  • Software Upgrades and Version Release
  • Maintenance and Support
  • Implementation
  • Training
  • Working Demo

Vendor Stability

You may be purchasing directly from the manufacturer or from a reseller. In either case, when assessing stability find out how long the product manufacturer has been in business, how many employees it has and what their installed base is. It’s important to select a software provider who will be around for years, and longevity and a large install base can be one indicator of stability. This can also indicate whether the vendor will continue to upgrade and improve their software, but we’ll get to that below. This is less important in the reseller. When considering a reseller make sure to ask for a letter from the manufacturer indicating that they stand behind this partner and will support the partners’ customers in any eventuality. In terms of stability, look beyond the organization marketing the software and do the research on the manufacturer.


Ask for references. Even if the software is a perfect fit for your company, this will hopefully be a long-term relationship and you need to check out the vendor and/or reseller. The vendor should be able to put you in touch with references using the software, and the resellers should be able to put you in touch with other companies for which they have provided similar services. Call the references and ask questions such as:

  • Has the system improved your overall performance?
  • Does it do everything you expected?
  • Are your employees satisfied with it?
  • Are you satisfied with the level of service provided?
  • How does the vendor/reseller react when you have problems?


Software Upgrades and Version Release

Technology changes quickly and you want to make sure that your vendor is not only up-to-date with the current technological advances, but continues to upgrade their software to address technological advances. Updates and new releases also indicate a commitment to the software. Ask how the provider handles bug reports and feature requests, how often they release new versions and what if any costs are involved in upgrading. In general software fixes or service packs are offered as part of the on-going maintenance, but different vendors have different schemes for upgrades to new releases. Some will require payments for new versions; some will provide them free-of-charge as long as you pay your annual maintenance fees. So in terms of upgrades and new versions ask about frequency, policy and costs.

With so many software vendors and resellers fighting hard for your business, you need to choose wisely so that you don’t wind up with an excellent software system behind which is a company that no longer exists. These top three criteria are good indicators that the company behind the product has staying power, good working relationships with its customers and a vision for the future. Our next installment will address understanding the actual working relationship you will potentially have with each vendor, so that you enter a partnership with eyes wide open.

What are Standard Operating Procedures? What do they mean in a business and why should they be taken seriously?


Standard operating procedures (SOPs) are a set of instructions for any particular operation within an organization. These instructions map out all steps and activities of a process or procedure, which, when followed with care, should guarantee a particular expected outcome. In the ERP world SOP is often used alongside or interchangeably with the similar term “best practice approach.” The idea behind this is that people have been working with a particular set of guidelines which they have determined to be the best way possible to get a particular job done: filling out a customer receipt for example, or completing a sales order. While each company is different, some of the broader processes and methods can serve as a model for other organizations with similar functions that need to be performed.

There are many benefits to having SOPs in place within an organization. In the first place, in documenting any function within an organization, you commit collective or even individual knowledge into something tangible: a document. Written procedures and practices then become part of the corporate knowledge base, and are no longer limited to one particular individual or group. Routine training of new employees can be based on the SOPs, and tasks across the company can be standardized. Performance of and adherence to set guidelines can be enforced.

In an environment where regulatory compliance is a requirement and spot checking is in place (pharmaceuticals, medical devices, chemical plants, etc.), SOPs are a must. According to some literature, one of the most frequently reported problems identified in regulatory inspections is a lack of written SOPs and/or the failure to follow them. In a manufacturing environment, SOPs are also imperative in order to insure uniform results, effective quality control, and ultimately, traceability. SOPs are not static documents, however, and they need to be reviewed regularly and updated to assure that they are keeping up with any new working procedures, developments and/or regulatory requirements that are put in place. Changes to the SOPs should be documented.

On a corporate level, SOPs are all about improving your business – be it striving towards continuity, or putting into action best practices for the long run. In the process of documenting and putting SOPs in place, companies may even discover better ways to complete tasks.

When deciding on whether to invest in an ERP system, before moving over to a new system, while in the process of implementing or even re-evaluating the way you do business: take the time to think about SOPs. To get real value from your software and your implementation, insist on working with SOPs. Make sure that the system you are having installed can handle the way you do business. And make sure that things are documented. The people that are involved in the work itself OR their direct supervisors should be consulted when preparing SOPs. If your consultant tells you this is not necessary – beware. The people in the trenches of your establishment are the ones responsible for doing the work documented in the SOP. The greater their involvement, the greater their sense of ownership, the greater their investment and ultimately, the greater the likelihood that they will adhere to the SOPs. Where this is impractical, at the very least the SOPs should be “owned” by the supervisor.

SOPs are proven to work. They can help you streamline processes, enhance performance, improve customer service and, ultimately, boost business. Investment of time in creating and maintaining SOPs will be well spent. In today’s economy, companies need to make the most of the resources they have. In creating SOPs you are not only using your resources wisely, but you ensure that hard earned knowledge and experience is shared, becomes tangible and is transformed into a corporate commodity.

Partnerships in the ERP/SaaS World


Channel conflict, changing terms, lack of support. These are all things that you will hear and read about in the world of partnerships and when considering the advantages/disadvantages of becoming a VAR for any type of vendor. In the shifting world of ERP/SaaS, you’ll probably be hearing about them more and more.


Changing Face of ERP


ERP systems have traditionally been sold as in-house solutions, where the VAR is often not only the sales conduit, but the implementation and service provider as well. Different vendors have historically implemented different terms and conditions for the opportunity to participate in their partner programs. Some require substantial payments for the privilege of becoming a partner, some don’t; some provide sales commission or leads but no commission, some don’t; some expect their partners to make money only on implementation and service, and many employ a combination of any or all of the above and more. With the new opportunities of SaaS, where an ERP system can be hosted and many of the implementation and service issues are necessarily falling back to the vendor, things have gotten complicated, and in some cases with big name vendors, even nasty.


While there is inherent logic in the decisions many VARs are making, to stick with the partnerships they have been nurturing for years, others are realizing that it may be time to broaden their horizons and try to make the most of the new offers that are now available. While there is a need to focus on a particular specialty or area of the market, both you and your market may benefit from more of a choice of offerings. A look at our previous post ERP Fees & Installation Alternatives will outline some of the different options now available, while we continue to focus here on how these changes effect the partner relationship.


Partnerships with Vendors


Trust. Beyond the terms of partnership, possible channel conflicts and the way they are addressed, and initial and continuing support, the bottom line when choosing a vendor is trust. Can a vendor be trusted to be fair and to treat their partners decently? Complaints will always be made about varying terms of the partner relationship and fluctuating commission fees, but in the long run, does the vendor treat their partners as true partners, or a necessary evil of doing business in today’s environment?


Fairness. Changing realities, new technologies and options in the market will ultimately result in vendors’ need to restructure their price lists or partner terms. This is fair. But do vendors give enough advance warning to their partners? Are they willing to discuss the issues and explain the points and rational behind the changes? Are they flexible with outstanding quotes to end customers, so that no face is lost in attempts to close the deal? All these are key questions to ask potential vendors and will help you determine whether they are fair in dealing with partners.


Business Ethics. Channel conflict, where partners have to compete against one another or the vendor’s own sales teams, is another touchy issue between partners and vendors. In addition, poaching customers is not an unheard of phenomenon among partners. While this may have more of a financial impact on partners in on-premise installations with one-time and annual use payments, it remains an issue in the SaaS arena. Different options have been employed by vendors to address this, including deal/lead registration and providing direct support, but the jury is still out as to the effectiveness of these options. Lead registration has been touted as a protection device to ensure that a partner does not undercut the partner who initiated the deal, but has also been thrashed as helping some vendors sweep up the deals themselves. A vendor that is truly interested in promoting the success of their partners will ensure that lead registration is respected and maintained. And that if at a later stage, for whatever reason, a customer decides to switch service providers, the partner who originally made the sale continues to receive some revenue, even if they are no longer providing support.


Cooperation. Some believe that if you have a captive market, then the partner working that market is at an advantage. We’ve actually found the opposite to be true. Healthy competition is not necessarily a bad thing. Also, when prospective customers see that there are more and more vendors of a particular solution, they are less insecure about investing in the said solution. As long as the vendor is looking out for everyone’s best interest, cooperation across geographic or even technical expertise lines can be bridged, making cooperation mutually beneficial for all concerned: customer-partner-partner-vendor, a win-win-win-win scenario.


Support. In terms of product support, one of the key indicators of a vendor’s willingness to work hand-and-hand with partners is the level of support provided. Often vendors require partners to take expensive training courses as well as pay for on-going support. While this does seem to be fair, it should not be abused by the vendor, and as much material as possible should be provided to enable the partners to help themselves. Again, this fosters the growth of a foundation of strong partners that can be self-reliant and independent, allowing the vendor to concentrate on their own priorities.


Ideally, vendors should be focused on getting the best product out to market and providing the support and infrastructure necessary to allow their partners and VARs to flourish. By significantly expanding and maintaining a growing footprint in their market, sales will benefit both the partners and the resellers. Look for win-win scenarios when reviewing terms and contracts, not only from the partner-vendor point of view, but from the partner-partner-vendor and customer side of things as well.


By Rebecca Haviv



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