About

How to select Software Systems

David Taylor, APAK Systems Inc. provides a guide to best practice for selecting software systems in the Asset-based Financing industry.

Published by the Canadian Finance & Leasing Association 2004

As in many human endeavors, spectacular successes are well publicized and spectacular failures long remembered. Efforts in the middle ground are often less easy to analyze as to success or failure. With system software implementations, ‘Fear of failure’ and ‘Hope for Success’ are fairly evenly represented within the management community. In seeking advice on how best to go about it, I believe it helps if you are honest about your own hopes and fears and offer some guidelines for both the optimists and pessimists amongst us.

The Objectives for Pessimists

Often expressed as “We just want to……

• Replace our old system
• Keep the users happy
• Avoid making the wrong decision
• Not spend too much
• Get the job done quickly

For Pessimists, the measures are, as
you would expect, a lot less ambitious…

• The old system is switched off
• We can live with it
• We kept within budget
• The business users are busy
• I still have a job

For both groups, the task and means of completing it should be the same, and should broadly follow these basic steps:

• Define objectives
• Establish success criteria and measures
• Set a target timetable
• Assess the resources needed
• Fill shortfalls and assemble the team
• Project manager prepares project plan

Project Planning

As the project begins to take shape, the following activities need to be undertaken:

• Appoint a Steering Group
• Create an Essential Needs Statement
• Prepare the team
• Research available systems
• Plan the selection process
• Allocate the time and begin!

The project now moves into its research phase in order to determine the answers to some basic questions as they relate to that particular organization.

• Should we build or buy?
• What systems are available?
• What technology platforms should we adopt?
• Who can help us with this process?
• How much will we invest?
• What is our payback period?

The Selection Process

There are some sound, well tried, approaches to the selection process which will usually yield a good but not unmanageable list of candidates. These steps should produce a progressively filtered field of candidates:

• Define a first level requirements search
• Be sure to ask key show stopper questions covering:

- Functionality
- Technology
- Experience
- Company size

• And be sure to define clear pass and fail responses
• Create the first shortlist
• Invite companies to the first “Show and Tell” session

In parallel with this, the team should be working at defining the needs of the business, again using a clear formulaic approach.

• Set detailed business objectives
• Have the business users define their requirements in terms of:

- Existing tasks in existing areas
- New tasks in existing areas
- New business areas
- New corporate requirements

• Check everyone’s understanding of both the task and the reason for the requirement.
• Define realistic volumes and likely future growth requirements.

Challenge all assumptions fearlessly, whoever may have made them!

The supplier & system selection process should now allow the use of checklists and scorecards, derived from the requirements definition process. The most usual pattern will involve:

• Issuing a Request for Proposal
• Evaluating the responses
• Checking everyone’s understanding again

Now comes several days of face-to-face demonstrations and discussions with the short listed suppliers. This process, which should take into account everyone’s limited tolerance for viewing screen after screen, is best undertaken in sections interspersing show and tell with discussion and negotiation sessions. Avoid the temptation to submit your team to ‘over-long’ days, or ‘over-long’ sessions. These topics will need to be
covered in depth:

• Functionality gaps from the requirements definition
• Apparent ease of use and intuitive presentation
• The suppliers financial accounts and business model
• The future business and technology direction for the supplier
• Customer references and descriptions of what each reference site may offer
• Supplier support contracts and definition of how they operate
• An initial project plan and the underlying assumptions on which it is
• Identification and high level definition of required interfaces
• Technical issues for hardware, software and communications
• Supplier and own team availability and composition
• Costs and Contract terms

Supplier & Software Selection Proposal

Once the supplier evaluation has been completed, the team will produce a supplier and software selection proposal to be presented to senior management or corporate board. This should include:

• The match offered to the defined business objectives
• A clear specification of all deliverables
• A definition of the project phases and milestones
• A specification of the project pieces & their ownership in both supplier and company.

Descriptions will be provided of the services offered, responsibilities and scope for:

• Project Management
• Specifications
• Installation
• Testing
• Training
• Technical Integration
• Additional third party systems
• Locations
• Communications
• Cost Management

Communication Plan

Once the company has made its selection and implementation decision, it is fundamentally important to develop a corporate plan that communicates to all staff:

• What we are buying
• Who is doing what
• Our acceptance process
• The timetable
• How we will measure success
• Which system and company we will be working with
• Why we made this decision

Communication should continue throughout the project, praising effort, celebrating success and honestly reporting setbacks or changed priorities.

It is important to remember the often-conflicting objectives and guidelines we set ourselves!

• We want long proven New Technology!
• A dedicated team available immediately!

Bear in mind:

• Your corporate risk profile is unique
• Some tasks are redundant - Some functionality unnecessary
• Your requirements define Your timetable
• You want your supplier to stay in business
• No worthwhile achievement is without pain

Conclusions

In summary, effective definition of the objectives and sound management of the implementation are at least as important as the selection of software and supplier. Even the best supplier can fail, given poor project control or ill defined objectives. Even the least able can deliver a good outcome if well directed and managed.

“Some single mind must be master, else there will be no agreement in anything….”
Abraham Lincoln 1864

“It’s just what I asked for but it’s not what I want….”
Anonymous Software Client 1983

For further information, please contact the author directly—

David Taylor, Director
APAK Systems Inc.
7070 Mississauga Road, Suite 330
Mississauga
Ontario
L5N 7G2
Canada
Tel: (905) 821 7332
Fax: (905) 821 1723