Choosing the Right Software Vendor (part 2)

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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.

Implementation

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

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.

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Choosing the Right Software Vendor (part 1)

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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.

References

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.

Workflow, BPM, ERP Systems and ERP Workflow Integration

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The aim of an ERP system is to provide an integrated solution to all business areas of a particular enterprise. Ideally, you have one software system that the entire company can access and work with. So, for example, all the data for finance, sales, accounting, human resources and inventory is managed in one central repository and each business group within the organization accesses only the subset of data that they need.

Workflow as a concept is nothing new. Even before the era of computers, there have always been established procedures for handling operations within a corporate structure. Take a purchase order, for example: an employee notifies their manager that they require a particular item; the manager then puts in a requisition, which, depending on his level of authority, may need to be bumped further up the management chain until it is authorized; it is then handed over to the purchasing coordinator and finally purchased. The workflow can be relatively straightforward or very complex, but it is basically a business process that consists of a number of sequential tasks performed in a particular order or following a set of rules that is designed to facilitate a particular objective. Examples of processes for which workflows are commonly in place include order processing and fulfillment, sales cycle and campaign management, performance reviews, medical/insurance claims processing, expense reporting, warranty management, invoice processing and more.

The ERP workflow can be part of the larger concept of Business Process Management (BPM), which is a more holistic approach to business processes. Companies that employ BPM aim to optimize their business processes while striving to be more efficient, more effective, and improve the level of tracking and control built into their processes as a whole.

BPM and workflow implementation force companies to sit down and evaluate their processes and the rationale behind them:  what is the flow of a particular task (e.g. draft -> ready -> financial approval -> final authorization -> sent to vendor), what possible scenarios exist, what rules need to be applied at each stage of the process (e.g., a purchase order cannot be moved from a status of “cancelled” to “sent to vendor” or any order over $10,000 needs another level of authorization), who is involved at each stage and what level of authority should they be granted. Creating a detailed blueprint of business processes, streamlining and regulating the workflow facilitates a greater degree of control; enhanced ability to respond to any potential issues; and increased efficiency, accountability and transparency for continued auditing and analysis of the process.

In many of the available solutions, in addition to automating the routing of documents and tasks from one person to another, email or SMS notification is employed to inform the next person in the chain of events that a document or process requires their attention. Rules can often be set so that another person in the chain is notified if a document remains at a particular status for too long (e.g. if the tracking document for an item in a repair shop remains by a certain technician at the status “in process” for more than two days, both the technician and his or her supervisor will receive automatic notification so that they can investigate the delay).

BPM and workflow functionality are increasingly a part of many ERP solutions, and it makes sense to implement such process maps and controls early in the game in order to maximize the benefits of the ERP system. Some ERP vendors offer built-in workflow functionalities, while others offer possibilities for third-party integration. If third-party solutions are employed, it’s very important that the ERP and BPM/Workflow groups understand and communicate about the technology and processes that are being implemented.

Remember: workflows involve humans, and the people involved at all levels of the process should also be involved in the initial mapping out of the processes before they are implemented. While mapping out the process, you may discover new and better ways to perform tasks or provide better oversight. The defining and modeling phase is often a learning process for both employees and managers. Collaboration during the definition process can produce enhanced processes, improve performance of both the system as a whole and of individual employees, and ultimately foster a sense of “ownership” in each individual regarding his or her part in the process itself.

In conclusion and to recap, workflow and BPM systems control the flow of information between individuals or departments, and direct it to the next appropriate processing stage according to an established workflow map. A good system should enable managers to monitor the progress of a particular process within the workflow, handle exceptions, escalate individual exceptions and generate reports that can be used to improve performance. It is therefore advisable that you make BPM and workflow one of your priorities when selecting or implementing an ERP software solution.