One of the trends in today’s shipping industry is to acquire standard systems (ERP systems), and integrate them with internal and external systems and information providers.
But if standardization, modernization and integration are high on the agenda – then how do you go about selecting the right solution from the right vendor?
Many companies fail to do a proper job in selecting, since they do not have the experience in how to do this, and end up making conclusions based on the wrong arguments.
Selecting and implementing a new IT solution can (especially if replacing one of your business critical applications) have large and long term consequences, and must therefore be considered well. You should avoid the mistake of a hasty decision, not looking into the crystal ball and understanding the long term impacts.
The best practice model discussed here suggests doing an evaluation based on 3 equally important factors.
Only by carefully evaluating each of these, will you be able to understand and predict the full picture.
Life cycle considerations
One of the most important assessments is to understand where the system and vendor is on a classic product maturity curve. Is it a new entrant? Or an old player – and if so, has he renewed the system?
But on the other side, you also don’t want to implement a system which is already over the top, so to find yourself with a system which will soon need to be replaced again. After all, you would want your investment to last for at least 5 years.
When evaluating standard systems, a classic requirements specification is not very useful. Instead, you will want to evaluate how the candidates support your business processes.
So the first step will be to establish a list of the business processes you would like to see supported. In this phase, you should consider the ideal solution – include all processes, not only those supported by your current system.
When you evaluate the systems, you capture how well each process is supported, while keep an open mind to other ways of supporting the process than what you are doing today. A new system is a good opportunity to redefine processes and organisational responsibilities.
Conformance to your IT strategy
The second corner in the evaluation triangle is the technical evaluation. This is a classic evaluation of how well the system supports your IT strategy. This would include parameters like which platforms are supported, how integration is done, is there a security module, etc.
But in addition to this, it is also recommended to pay attention to which development tools have been used, and which development method the vendor is following. You could argue this shouldn’t be of your concern – however, it is an important parameter in understanding how the system can evolve over the coming years. A system based on old technology is not only likely to offer fewer upgrades, but could soon be up for replacement.
The last angle is to understand the vendor behind the system. Again, this is important considering the long term aspects. You should not only evaluate his size, services offered and financial stability – but also perform a Client Satisfaction Survey with existing clients.
And ideally, you will also visit his offices and talk to the people on the ground that you will be dealing with on a daily basis once the sales manager has done his part.
Since there will often be a tendency to get emotionally impacted, blinded by a good sales manager – and not least forgetting important parameters in demonstrations – it is recommended to use a score model to prepare and evaluate.
A good way to do this is to list all the parameters for each of the 3 areas in an Excel sheet. Once you have demonstrations or workshops, you will mark in the sheet how well the system / vendor lives up to your criteria.
By doing so, you have a structured approach, and compare alternatives in a fair and transparent way.
The outcome can be e.g. 2×2 charts, which are great for management overview – or charts which show a breakdown of which candidate is better in various areas.
In this relation, it is recommended to also evaluate your current system / vendor to have a bench mark
Performing a professional evaluation requires the activity to be dealt with as a project. A road map which will work fine in many cases is as below:
- Establish a project governance, including a steering committee, a project manager and appointed users
to represent business evaluations
- Establish the evaluation model you will be used. What are the parameters important to you?
- Identify the potential candidates and send out your evaluation model as an RFI
- Based on the RFI responses your do an initial scoring in your model and select a few top candidates to
come and present their offerings. At this stage, it should be a relatively high level workshop, where you will
verify their responses and adjust the scoring model accordingly
- At the end of the analysis phase, you should be able to select one top candidate. If not, you will need to repeat some of the evaluation
- The biggest thing in the verification phase is to run a detailed workshop with the top candidate. You should do this on the basis of your own real life data, executing all the processes you have defined in your evaluation model. While doing so, you update the scoring – and specify any gaps in the solution which the vendor will have to resolve.
- In parallel, you will dig one level deeper in the technical evaluation and consider how this system could be implemented, potential impact on your infrastructure, etc
- And last but not least, execute further analysis of the vendors capabilities, including satisfaction surveys and possibly visits to existing clients and vendor offices
- If all these activities verify the top candidate to be the right choice, you will start the contract negotiations – including the gaps identified during the functional workshop
Obviously this model can be adjusted and refine to your specific needs and priorities.
But following such a structure will not only ensure you make a well informed and strategic decision to last for years – it also establish a strong foothold in the organization with the people who have been involved in the selection process, which is a critical factor in any successful business implementation.