One for the Money

The traditional software selection cycle has typically been a multi-step task. By definition, the more complex the function that the software is to support, the more complicated the procedure to choose a program. However, to one degree or another you will need to address each of the steps below in any selection process:

  1. Establish a project team. Selecting a major software tool successfully means that the solution’s acquisition, implementation, and operation are cost-effective, that it will meet the objectives of the project, and that it performs as represented by the vendor. To ensure that these criteria are met, the team handling the selection process should represent several essential areas of the organization.

  2. Map the process. One of the best ways to begin is to ensure that the organization understands what it is actually doing in the relevant functional areas. The team needs to create a detailed picture of what “actually happens on the floor” or “in that department” or “function.” This forms a solid basis for developing future requirements and provides insights about the differences between how work is accomplished and management’s beliefs about how things are done.

  3. Define requirements. The team can now establish functions and features requirements. It will be important at this stage to incorporate both near-term needs and capabilities that pertain to the organization’s long-term direction.

    By soliciting management’s best guesses about anticipated changes, the team increases the chances for the project’s success and contributes to the ultimate longevity of the software’s value.

  4. Determine a search strategy. Concurrent with the steps above, the project team can begin to develop a strategy, addressing issues such as number of vendors, vendor experience in similar organizations, size of the installed base, platform, financial stability, and the maximum number of candidates to consider as preparation for the information-gathering phase.

  5. Get educated. In the course of team efforts, all members need to develop a knowledge of the solutions available. Vendor and expert Web pages, industry-specific and general newsletters, trade shows, professional and educational conferences, and conversations with and inquiries to peers, customers, and suppliers will all add to the knowledge base.

  6. Create RFIs. If the candidate group is large, the next step may be a request for information (RFI), in which you solicit data directly related to a fairly simple set of essential criteria from all candidates. The results of the RFI should enable the team to reduce the candidate list to vendors qualified for more serious consideration.

  7. Disseminate RFPs. A request for proposal (RFP) is provided to a short list of vendors. The RFP is a much more detailed and specific set of requests for information about software capabilities and about the product platform, its development, the target market, and the existing installed base and costs. An RFP should also include questions regarding the vendor’s approach to implementation, modifications, product enhancements, and the extent of the client’s obligation in the project.

  8. Conduct presentations and site visits. Activities in this step might include hosting presentations, interviewing existing client references, and participating in site visits. The team will need to prepare a follow-up list of questions designed to confirm representations already made, to clarify responses that may have been unclear, or to explore areas not addressed earlier.

  9. Select a vendor. Following this step the team should be prepared to select a first-choice vendor, recommend it to management, and negotiate a contract. Notify the second-choice vendor of its position, on the chance that it will become the vendor of choice if the preferred vendor is unable or unwilling to come to agree on the solution and its costs.

  10. Negotiate and implement a contract. Contract negotiations can be a world unto themselves. While price is the primary issue (and it is almost always negotiable), other sticking points include any cost for “additional” services (phone support, training, etc.); the nature, timing, and cost of modifications; warranties; ongoing maintenance costs; and payment terms.

Industry trends

A number of trends worth noting affect the selection cycle. First among these is the fact that the software industry is now in the throes of a vendor consolidation, reducing buyers’ options. Although this is less true for vendors of logistics-related software other than WMS, the same trend is likely to appear elsewhere soon.

Product life cycle

As with hardware, software product life cycles are shrinking. Note that this assessment bears some resemblance to viewpoints held in the ’70s of the demise — not just the decline — of legacy systems because of powerful PCs.

Vanilla vs. custom

Vendors want to install generic, base-package software rather than modified applications. Pressure exists to minimize changes and reduce the variety of systems a vendor needs to support. Concurrent with that approach, of course, is a higher cost to modify the package.

Technology issues

One technology trend is the comparative neutrality of platforms. Solution buyers more frequently consider how a product will improve their circumstances and focus less on the platform or operating system.

Maturation of applications

In the past decade technological capabilities have grown, the scope of well-supported functions has widened, and the extent of user-configurable applications has increased significantly.

Finally, if you are considering outside help in implementing a project, ask around. Industry colleagues, peers, customers, and vendors may have ideas of value. Professional educational organizations such as WERC, CLM, APICS, and IIE can point you to other avenues.

These outside resources can fill in gaps in your team’s expertise or can supply the know-how to accomplish the project from beginning to end. The best approach is probably to solicit information from potential providers on how they see themselves best assisting you and the vendor in implementing the proposed changes.

Ron Hounsell is vice president of software solutions at Tom Zosel Associates, a distribution and logistics consulting firm based in Long Grove, IL. He can be reached by e-mail at, by phone at (847) 540-6543, and by fax at (847) 540-9988.

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