Peter Borak
Many finance/project directors blame vendors for supplying accounting/business systems that do not work properly. It is, however, also the responsibility of business managers to make the buying decision, i.e. to select the proper supplier (right system + implementation).
When buying a new business system, a company first contacts the business package vendor. An IT salesperson is the most common contact. Although the IT salespeople have some business accounting experience and IT knowledge, they mainly rely on their "pre-sales consultants/application specialists" (for product demonstration + installation), whilst they rarely bear responsibility for the package implementation.
Consultants approach their clients in a different manner - they take responsibility for the implementation of packages their clients have chosen, often offering independent selection services to start with.
Another option is to use the company's own IT department (existing in larger companies), should the company find it capable to perform such a complicated task.
It is possible that a company is going to be buying software from one or more vendors, i.e. either directly from the supplier or via a third party (reseller, system integrator). In addition, the company may also be purchasing hardware, operating systems software, cabling and communications systems, not just the implementation services (including project management, consultancy, training and system set-up), and finally the ongoing system support. Buying such a complex product is a tough decision.
The management responsible should clarify some key requirements for a new system. This is the first step on the way to the satisfactory implementation of the chosen IT package. There are eight elementary steps that should be followed:
1. Brevity is the soul of wit - note down only the most critical success factors of the project (expectations - what the system should do; future flexibility of the system, potential requirement for the years ahead...)
2. Prepare an invitation to tender, specifying precise requirements for the system operation. (Also, specify key business needs, an anticipated volume of work and a summary of standard/non-standard requirements).
3. Send out the requirement documents to the leading vendors. (Conduct your own research in this field; contact your company's business partners for advice/opinions, etc.)
4. On the basis of your own evaluation of the product offered, make a short list of the most successful candidate vendors.
5. Keep the selection process short, (there is always the possibility of getting a better deal); discuss the price at the outset with the potential suppliers.
6. Fully concentrate on the vendor/product presentation. (Topics featuring financial stability of the vendor, cost of the system, level of functional fit, system reliability, ongoing support, implementation time and future flexibility.) The product demonstration can be "risky" - the vendor will naturally highlight the system benefits, hiding its weaknesses. Make sure that the standard of the vendor's implementation skills is adequate.
7. Pre-test the product on your company's premises (product prototyping); have training on the application (this exercise can be charged, or be part of the contract negotiations).
8. Always enter the contract according to the standard procurement contract guidelines. Prior to this check the reference sites stated by the potential vendor. (Have in mind that the referees may be specifically "cultivated" by the vendor to give just a positive reference. Again - conduct your own research for an unsolicited opinion on the product.)
Peter Borak is Information Risk Manager at KPMG Slovensko. His column appears monthly. Send comments or questions to pborak@kpmg.sk.
