The way you need to conduct business has changed (market forces or regulatory change) and your legacy software is not flexible, scalable, or is too costly, to modify.
You lack the analytics and insights into your business to make better, faster decisions.
Your staff’s productivity is constrained by spreadsheets, manual / paper-based processes that lack automation and scalability.
Your technology is dated, no longer supported by the vendor and you are forced to change.

The globalization of competition and market opportunities, enabled by rapidly changing technolgy solutions, has increased pressure on management to lead their businesses successfully. With almost all sectors of the economy having to cut costs to survive the recent recession, the challenge now is to restore the right infrastructure to take advantage of growth opportunities. How does this play out in your company?

KEY QUESTIONS THAT NEED ANSWERS

Whatever the reason for your need to look at new systems, there are some foundational questions your Executive Team must address before you commit resources (people, time, money) to this initiative. During TSI’s 14 years of helping clients “choose and use” software, the following are some of those questions that often are ignored or answered poorly. The outcome is invariably disappointment in the project’s cost, time and/or business benefits realized.

Consider these questions:

Is your business strategy clear enough so you can define the key business benefits you want from this initiative? Is your IT strategy aligned with your business strategy?

Do you really have enough of the right resources to undertake the selection AND the implementation phases? How good are your business SME’s (subject matter experts), do they have project management skills, do they have the time, have they evaluated software before?

Are you realistic in your funding estimates? Do you have some order of magnitude estimate so you can secure adequate board approval? Do you have a Business Case that will support the costs of this initiative?

How prepared are you for the change management aspects of this initiative? What reactions are likely if you seek to eliminate redundant processes, centralize some functions, or consider Software as a Service (SaaS) options in place of traditional on-premise systems?

Let’s address these questions below.

BUSINESS STRATEGY

If you want to avoid the risk of selecting software that lacks capability or flexibility to support business model changes (e.g. multi channel services/orders, multi-office project engagements, shared services, etc), it is critical that your Executive Team provides what TSI calls “Business Context” to the project.

TSI defines this by facilitating a workshop at the outset where the Executive Team and the Project Team develop a shared understanding of the organization’s strategy, industry trends, customer issues and other organizational factors that will influence the nature and content of the desired functional requirements.

This shared understanding helps provide focus and direction for the evaluation of software so business benefits can be defined as objectively as possible. Avoiding this or doing it poorly makes it difficult for the business to select the right solution. It also makes it harder for the IT leadership to assist their colleagues in aligning the IT strategy with the business strategy: if the business leaders are not clear about their needs, how can IT align with them?

RESOURCES

Most organizations today are running lean on staffing and it is unrealistic to expect key staff to perform their day job and also lead an evaluation project. The risk is their subject matter expertise is lost or diluted, to the detriment of the organization’s strategy.

Additionally, many users lack the cycles of experience to plan and conduct an evaluation of software. It is one thing to know those needs, it is another to research and qualify a short list of vendors, then plan, conduct and evaluate software demonstrations. The best use of their time is providing input to the process, evaluating and reviewing findings/outputs. It is also important to have collaboration between business leaders and their IT colleagues, as the latter need to understand the business strategy and requirements so they can evaluate the technical aspects of the solutions being evaluated. To address this, consider using an outside consultant who can plan, coordinate, facilitate, analyze and summarize the evaluation and selection efforts.

TSI consultants regularly review and evaluate software solutions and bring to bear their experiences from multiple engagements and situations to help define requirements that align with your strategy. They know what questions to ask, how to ask them and how to identify key differentiators and “deal breakers.” As an independent firm, TSI has no financial ties to software vendors, nor does it have a bench of consultants waiting to implement the software solution.

FUNDING AND ROI

It is important to be realistic about the funding of a new software initiative. Today there is a lot of hype that SaaS (Software as a Service) solutions are significantly cheaper than “on premise” software. That may apply if you compare costs only on day one, it may work in one situation, but it is risky to assume it will always apply.

Unless your project starts on day one of your fiscal year, it is likely to straddle two fiscal years. Your funding estimates should consider the whole TCOTS picture – Total Cost of Ownership, Transition and Support- for at least 3 years and more likely for 5-7 years. In addition to the Evaluation and Selection phase, costs that should be considered may include:

Ownership	Licenses, Hardware, Integration (of systems)
Transition	Implementation (from Development -Testing-Go Live), Data cleansing and migration, Staff training, Staff Backfill, Productivity Impact
Support	Hosting, Annual Maintenance, Major Upgrades

The closer you are to a selection decision, the more refined your estimates will become.

The funding estimate is also a key component of the Business Case - when the project is over, what are the Business Benefits you expect to realize? Benefits are not all achieved on day one, but over time, as people adapt to new processes and become better at exploiting the new software. The benefits need to be focused on “hard” values as much as possible (e.g. increase order volume 2x with 10% increase in sales staff; save $/year in hardware/rent, etc). But qualitative factors like “improved analytics for decision making” should also be included so post "go live" assessments can be made on their degree of improvement.

IT'S ALL ABOUT CHANGE MANAGEMENT

Software system changes are often tied to other change events: the mere roll out of a new process, using a new software solution, may impact how work is done, who does it and where. Some redundant or value-less tasks may disappear and that frees up resources. For some people, this may be disconcerting.

The advent of the software implementation phase is often used as a platform to introduce organizational changes, improve adherence to policies and reduce risk of error or non-compliance. If your competitors are breathing down your neck, your ability to realize the benefits of the new software, improve efficiency and respond with agility to the market become more critical.

Change Management should begin the day you decide you want to look at new systems. Mapping out the expected changes, planning a communications strategy and leading by example are key ingredients to bringing about change. And don’t forget to continually recognize and reward those who are leading the change. A well communicated and executed change strategy has a better chance of gaining acceptance and adaptation by the enterprise; but, it needs a follow up plan for those who don’t understand it or who resist the changes.

CONCLUSION

The evaluation and selection of the right software solution for your organization is key to implementing the solution and realizing the business benefits you expect to achieve. The right selection relies on you to define the business strategy, to guide the process, to assign appropriate resources and funding, and to plan your change management strategy.

Remember, the software really is inanimate. What really counts is making the right software selection and helping your organization to exploit its functionality to realize the business benefits you desire.

At TSI, we believe “An Ounce Of Selection Is Worth A Pound Of Implementation.” For more information on how we can help answer your questions on selecting the right software solution, please contact Len Green at lgreen@transforming.com or 847.705.0960 x203.To learn more about our approach, click here.

Click here for a PDF version of this newsletter.

A reminder: Check out the TSI blog at http://blog.transforming.com/.

Transforming Solutions, Inc.

Info Source - Volume X, Issue 2 - March, 2010

WE NEED A NEW SYSTEM, BUT HOW DO WE CHOOSE THE RIGHT ONE?

By Len Green