The 7 Deadly Mistakes of Selecting Business Systems: Part 3

Updated: August 25, 2010

Deadly Sin #5: Relying On Others
It is worthwhile to take on board the advice and experience of others but do not place undue reliance on it as everyone's frame of reference will be somewhat different. At the end of the day it's your reputation that is on the line so you need to take the responsibility. The "devil made me do it" type defense will not be very useful if things fall apart. Two sources of opinion that can be either helpful or unhelpful are reference sites and consultants.

Reference Sites
The absence of reference sites certainly is a red flag, but the fact that an organization can produce reference sites only indicates a success percentage indeterminately greater than zero. You certainly want to talk with satisfied customers but be wary of obviously cultivated "tame" clients. To get the most value from the interview concentrate equally on their experience and thoughts regarding selection and implementation, as on their opinion of the service provider and software.

It should not be necessary to talk to more than 2 sites if you are provided with relevant sites in terms of size, industry that vary in terms of length of time since installation. Respect people's time in that they are not being (or shouldn't be) paid to talk to you.

Independent Consultants
If you are very unsure of selecting a package, you may think of using self styled "independent consultants" - an oxymoron if ever there was one!

It's quite unreasonable to expect that anyone with experience does not have bias and there are many ways you can be affected by a consultant's bias without you realizing it.

Recently there was the case of a well known company that conducted an evaluation and put their selection to the board for approval. The board for reasons known only to itself asked for an "independent" report from its equally well known second tier auditing firm. The "independent" report resulted in overturning the selection decision. And surprise, the auditing firm ended up implementing one of the packages it did business in. That company is now looking to throw the system out after a year or so. Blatant conflicts of interest like this are more common than you may think with people proving surprisingly susceptible to the "independent" sales approach adopted by some accounting/consulting firms.

That said, there are also very good consultants who are professionals and can add value to the selection process particularly by providing you with a selection methodology and acting as a sounding board. They also can offer good skills in process reengineering which client and vendor organizations often lack.

Deadly Sin #6: Swayed by the Pitch
Question: What's the difference between a used car salesperson and a software salesperson? Answer: The used car salesperson knows when they're lying.

This joke may let software salespeople off the hook but certainly not you. To be forewarned is forearmed so here are a few of their favorites.

Size Matters! Well it may or may not. It really depends how size is used. Big does not necessarily mean better, nor does small mean more personal service. The things that are attributed to size need to be verified in their own right rather than just attributed automatically. That said, the minimum size of a mid market service provider is increasing because of the resource demands of technology and what it takes to be a full service provider.

One system that does it all! One system may do it all but does it really meet your requirements? There are software vendors, especially those that specialize in staffing software, that focus on specific areas of functionality (i.e. front office and back office staffing software). The right solution should allow you to pick the ‘best of breed' and then via seamless integration it may better meet your list of recruiting, CRM, Invoicing, Payroll and Accounting requirements.

Legendary Customer Service! You won't meet a software company that does not claim this and can't produce a few tame reference sites to back this up. To get to grips with the likely reality for you, review their customer service processes and ask questions related to post-implementation support options.

100% referenceable! This is a real favorite so we'll spend a little more time debunking this. If you believe doctors never lose patients then you might believe this one. To claim this, an organization really has to have a low opinion of your analytical ability. Given that the success of an implementation does not rest 100% on a software provider's skill (just like a patient's recovery is not 100% based on the doctor's ability) then it stands to reason that some implementations will be unhappy ones although not primarily because of the software provider. In addition, obviously there are the unhappy ones caused by vendors. The point however, is that even assuming a service provider is perfect (which you never should) any organization that has implemented any reasonable number of sites will have a number of detractors.

The question therefore, is not if the service provider has implemented unhappy sites or sites that were unhappy at one stage, but how many? To claim 100% satisfaction in the face of this reality is a clear indicator of the lack of the general reliability of any of the organization claims. However, to back the claim, organizations will then show you their "client list and invite you to call any. This trick works a couple of ways. One is that they gamble that the odds are that the couple of names you select to call won't include the awkward ones. (Notice how they never let you keep the list they flash in front of you.) The other way is to simply remove awkward names and obviously it does not include the names of clients that may have left them (the really unhappy ones). If you want to have some fun with people pulling this stunt ask to see them print their debtors aged trial balance report so you can compare the two lists!

Deadly Sin #7: Lake of Selection Process
It should not be surprising that the quality of the selection process will directly impact the correctness of the decision.

The process should be structured so as not only to ensure disciplined analysis but also to reduce unnecessary cost of the selection process which is often an underestimated cost component of the overall decision to implement a new system. System selection is a project in itself and as such should have a planned timetable. This will make it easier to work with vendors and the internal people involved in the selection process, and helps set appropriate expectations.

A selection process could be structured as follows:

  1. Assemble selection team.
  2. Perform Needs Analysis taking into account business strategy and objectives.
  3. High level review of possible vendors.
  4. Prepare Business Case and obtain approval.
  5. Prepare Statement of Requirements for vendor response.
  6. Short list 3 vendors.
  7. Complete scenario based evaluations.
  8. Select preferred vendor.
  9. Complete Implementation Planning Study engagement with preferred vendor.
  10. Obtain final approval.

Compile a statement of requirements before you have detailed discussions with vendors. This will ensure focused discussions and enables the vendor to more effectively provide you with information. Make sure when developing a statement of requirements that you talk with the right people in your organization and stay focused on where the potential business value lies in changing systems. Be wary of statement of requirements completed by consultants. While they often look impressive they can be unnecessarily long and are more intent on generating fees than ensuring quality of response.

Often undue reliance is placed on long lists of functionality requirements. While these are easy for consultants to churn out they have shortcomings because 1) vendors interpret the requirements generously (because everyone else does!), 2) functionality in packages is converging and 3) it largely ignores the importance of process or ease of use. More powerful than a functionality requirements list but seldom utilized is the compiling of demonstration scenarios complete with scripts and sample data. This, more than anything, will protect you from innocent misunderstandings or demonstration sleight of hand.

Once you have selected a preferred vendor don't rush into signing a contract. Work with them first on further defining your requirements with system walkthroughs and design sessions. Also spend time together better scoping and planning the project. This will provide you with a much better feel for the quality of their work and what will actually be delivered at the end of the day. While this work is chargeable, the relatively small investment up front enables you to validate your selection decision. It is cheap insurance compared to the cost of a wrong decision.

Featured Research
  • Why Your Educational Institution Needs to Implement VoIP

    VoIP makes a lot of sense for educational institutions—and it’s not just because of the substantial cost savings. Other benefits include increased efficiency and integration options. Emergency responsiveness can even be improved. more

  • Is Your ERP Solution Out of Date?

    Enterprise Resource Planning (ERP) is a modern, large-scale software program designed to help businesses improve the internal flow of important corporate processes and communication. more

  • How Video Conferencing is Transforming Healthcare

    The telemedicine revolution is finally happening. Experts have been discussing the potential for patients and healthcare providers to connect remotely for years, but the market is just now moving to adopt it—in a big way. Data suggests this market will grow over 14% annually through 2020! more

  • How to Update Your Contact Center Software

    If improving customer experience is important to you (it should be), then 2017 may be a good year to reevaluate the software you use for your contact center. With customer preferences shifting, the importance of an efficient contact center has never been higher. You cannot afford to simply focus on keeping costs low. Significant competitive advantages are available to businesses who manage this area effectively. more

  • Leading the IT Revolution

    The status of technology within an organization is rapidly evolving—and so is the role of the CIO. With breakthrough capabilities enabled by new technologies, a growing shortage of available developers, and an increasingly tech-savvy business user, the role of IT—and the CIO in particular—is morphing into one of strategic advisor to the business and driver of innovation within the company. more