5 Ways to Untangle the Complex Back-End Software Selection Process

By Tocky Lawrence

Web Exclusive: 3 More Ways to Help You Find the Right Back-End Software

Continuing my list from the print article, “5 Ways to Untangle the Complex Back-End Software Selection Process,” here are three more tactics/strategies to consider when chartering through the unwieldy task of selecting the right back-end software system for your catalog/multichannel business.

1. Reference Checks and Site Visits
A critical aspect to identifying the right vendor is conducting reference checks and site visits. Vendors typically provide a list of three to five clients for reference checks. It’s best to take that a step further and contact clients outside of the list the vendor provides. And don’t just ask typical simple questions such as, “Does the software work?” or “How did you configure order entry?” Ask more revealing questions, such as, “Did the vendor do what it said it was going to do?” “How did the vendor treat you?” “How did the vendor respond when things went wrong?” “Did the install meet the implementation schedule?”

The face-to-face meeting with a client using the software has always proved to be worth the investment in travel and expense. Visiting at least two client sites provides a good indication of how well the vendor does what it says it's going to do. Not only is it recommended that you visit at least two client sites, but you should also consider visiting the vendor’s headquarters to meet with the executives of the company, the implementation team and the application developers.

2. Vendor Strategy
Does the vendor have a long-term development strategy for the software? Does it use feedback from users for implementing new features, or does it require that each client fund modifications, which are then incorporated into the core application? How does the vendor prioritize new features?

3. A Successful Partnership
Last, but not least, one of the most important keys to successfully choosing the right vendor is having a good culture fit. Creating a partnership with a vendor that understands your business, is willing to work with you and “gets you” is paramount to a successful relationship. That's why you want to spend the time on-site at the vendor’s location to meet with the executive team, project and account managers to make sure the “fit” exists. Doing so will give you a clear understanding of what it'll be like to work together. At the end of the day, creating a successful client/vendor relationship means being able to look them square in the eye and trust them to deliver on whatever is promised.

Selecting software for order management or warehouse management systems, e-commerce solutions, or other applications is a challenging task. The process begins by documenting a set of requirements, constructing a request for proposal (RFP), identifying vendors, viewing Web demos, and conducting site visits and reference checks. But a trend is emerging to select vendors based on word-of-mouth recommendations and two-hour Web demos. The question is, is that really the right approach?

The right vendor is critical to your success, and the choices can be overwhelming. If the software meets your requirements, how do you determine if a vendor is right for your business? Here are a few points to consider.

1. Full Cost
No matter how many times I’ve heard businesses claim cost isn’t a primary selection factor, it always becomes one after RFP responses are returned. But does the RFP have enough information to ensure the pricing is accurate? Does the pricing include software, hardware, number of user licenses, transactional volumes, upgrades, maintenance, training, integrations, modifications, conversions and implementation services?

I’ve seen clients develop what they thought were good RFPs, which the vendors responded to appropriately with initial costs based on the defined requirements, but due diligence determined the real costs would be more than double the original. The best course is to have an RFP that covers all the requirements, and also identifies any unique business processes. The more detail provided to the vendor, the closer pricing will be to actual costs. Key areas that affect pricing are data conversions, integrations and implementation services.

2. Stability
When investing in software — either purchasing a licensed solution or using a software-as-a-service model — vendor stability is key to ensuring that vendor will be around in the future. Does that mean a vendor has to have been in business for 25 years? No, but there are questions that need to be answered.

Besides how long the vendor has been in business, consider if the executive team includes proven industry leaders. What’s the size of the vendor? What’s its core business, and does its software support your industry? How’s the vendor staff organized? How many people are within the organization? Is the software solution proven in the marketplace? Inquire about where the vendor stands in the market: Does it consider itself a top-tier, mid-tier or low-tier player? Is the vendor being acquired or acquiring other companies? Is it involved in any lawsuits that may affect its services?

3. Financials
Also try to determine if the vendor is financially secure. Is there an investment group backing the vendor? Is it public or private? Have the vendor describe its ownership structure, including any parent or holding company. Ask for its total billings/revenue and the revenue for the type of business segment you’re in.

4. Client Base
Your vendor’s client base will indicate its experience in your business segment or industry. You should get these questions answered: Is the vendor a strong player in B-to-B or B-to-C? Does it specialize in apparel,
electronics, etc.? Most vendors will share their entire client lists.

Special Report - Operations & Fulfillment: 5 Ways to Untangle the Complex Back-End Software Selection Process