Software Evaluation, Selection & Implementation – Part IV of V

In the first three parts of this series, we talked about some key factors to consider when selecting financial accounting software, such as looking at where the accounting application sits relative to the technology life cycle, how to decide on what selection criteria are the most important, and what the pros and cons are of cloud computing.   Keeping these key factors in mind,  let’s now talk about a better way to select and implement new business applications:

Step 1 – Form a Selection Committee.

When selecting new financial software, it is critical that you have buy in from everyone in the organization.   This isn’t going to happen if you have only one or two people doing the evaluation and making the decision.    At the same time, you don’t want to have too many people.  The ideal selection committee should have four to six people.    These people should all have a stake in the decision.      Make sure that the committee includes, at a minimum, key users, an executive level decision maker and an IT representative.    Also make sure that committee has an internal champion or project manager that is looking forward to making a change and has a vested interest in making sure that the selection process is successful. 

 Step 2 – Define Your Objectives

Start by making a list of the business problems that you want to solve with your new software.    In other words, why are you making a change?    What are your goals?     This list should include a minimum of four to five business issues and a maximum of ten business issues.   Make sure not to simply create a list of features that you want to see in the software.    Leave that to the vendors or value added resellers to identify.

 After you have your list, prioritize it.    Then review it and think about whether your issues are systems issues, process issues or people issues.       If they are people issues, new software isn’t going to help you.   If they are process issues, new software may help, but only to an extent.     In fact, if your current processes are bad, new software could make it worse.    That reminds me of an old saying, “If you automate chaos, you get turbo chaos”.     If your primary issues are process issues, consider hiring a consultant to help you with business process re-engineering before attempting to implement new software.

Once you have defined and prioritized your business objectives, define the benefits (both hard and soft) that you expect to achieve.     Hard benefits are benefits that result in hard dollar savings.   For example, you might be able to eliminate a position.    Soft benefits are more subjective.   For example, you save some time that can be used for other revenue generating tasks or maybe you improve customer service and this leads to more sales per customer.   

After identifying the benefits, put a dollar value on all of them (in some cases these will be best guesses) and come up with a three year total.     This should give you a starting point for how much you may be willing to invest in a new system.     In other words, if you can’t pay it back in three years, then maybe it’s not a good investment.

Step 3 – Identify Vendors/Solutions to Evaluate

I once heard someone say that selecting software is like selecting wine.   If you know you’re having fish for dinner, for example, you probably want a white wine versus a red wine.     But, what type of white wine should you purchase?  Do you want a Chardonnay or a Sauvignon Blanc, for example?    Do you want an expensive wine or a budget wine?   Unless you are a wine connoisseur, you will probably ask someone (or multiple people) to recommend a couple of options and then you select from those options.

With financial software, I recommend the same approach.  Don’t go on the internet and get a list of 20 software packages to evaluate.  If you do, you’ll just confuse yourselves.  Instead, ask your business advisors what they recommend and why.   For example, ask your CPA what he or she thinks or if he or she can recommend someone for you talk to.   Also, ask others in your industry what they use and whether they would recommend it.    Then pick two or three software options and limit your evaluation to those two or three.     By doing so, you will be able to better compare and contrast.  Furthermore, you will have more time to focus on what is really the most important factor, your implementation partner.    Make sure that you have someone that can help you 1) go live on-time and on-budget  and 2) get the most from your software investment.

TIP:  If you are considering industry specific solutions, make sure that you include in your list of software applications at least one mainstream ERP solution like Microsoft Dynamics GP.    That way you will be able to better compare and contrast the technologies and the pros and cons of the two approaches.

Step 4 – Request for Information

After you have identified two to three software vendors / value added resellers to evaluate, send them a short, 2-4 page Request For Information (RFI).   In this RFI, make sure that you include: 

  • A detailed description of your organization with an organization chart.
  • Your mission statement and/or company vision.
  • The prioritized list of business objectives that you created in Step 2.    
  • A list of your current systems / applications and an indication of whether you want them integrated with or replaced by the new software.
  • A list of users and their roles and responsibilities. It is okay to just list positions and responsibilities if you do not want to share names.
  • Names and titles of everyone on your selection committee.
  • A request for vendor background information, including number of people, experience level of the people that will be working with you, number of customers, certifications, etc.
  • A request for a high level price estimate for software, maintenance and implementation.   Keep in mind that differences in implementation costs are likely to be due to differences in scope of services.     You will need to make sure that it is clear what services are included before you actually select a system and sign contracts.
  • A request for a technology overview. For example, is it available through a SaaS model, or through a traditional license or both?  Is the database MS SQL Server?   What is the report writer?

Step 5 – Software Evaluation

As a next step, ask the vendors to demonstrate their software to your selection committee.    Give them some general guidelines of what areas you want them to cover, but do not ask them to follow a script.  Some people believe that you should make all of the vendors follow the same script so that you can more easily compare the solutions.    The problem with that, however, is that it doesn’t allow them to properly showcase the strengths of their software.    Instead of trying to direct the demonstrations, set general guidelines and then sit back and observe.

Do your demos close together to make it easier to compare and take good notes.    Meet immediately following each demo to discuss the pros and cons.  Be sure to ask the vendors for follow-up demos, if you feel that you need to revisit a topic or drill deeper into it.    The initial demonstrations should ideally be in person, but web-based follow-up demonstrations are fine.

TIP:  If the vendors ask you for the opportunity to meet with you and review your processes prior to the demo, encourage them to do so.    If they truly care about providing you with the right solution for your needs, they will want to do this.  In fact, if they don’t ask for the opportunity to meet with you, you probably don’t want to work with them.

To be Continued…..

Maner Costerisan, a Michigan-based CPA firm and Microsoft Gold Certified Partner, specializes in helping Not-for-Profits improve operations and support their mission through accounting, CRM and productivity software solutions.   We are certified resellers for the leading mid-market accounting software solution, Microsoft Dynamics GP, and the leading cloud-based financial management and accounting software solution, Intacct.    For more information on how we can help you excel in these challenging economic times, please contact us or visit our website.

Comment ( 1 )

  • Businesses rely heavily on software to make important business decisions. It’s important to evaluate all of your options and make sure that you choose the right software for your business and consider many factors including size and growth potential.

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ERP professionals providing insight and advice for not for profit organizations.