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Acquiring Enterprise Software: Beating the Vendors at Their Own Game
- By Jacques Verville, Alannah Halingten
- Published Jul 24, 2000 by Pearson.
Book
- Sorry, this book is no longer in print.
Description
- Copyright 2001
- Edition: 1st
- Book
- ISBN-10: 0-13-085731-9
- ISBN-13: 978-0-13-085731-6
Very little is known, and even less has been written, about what companies need to do to successfully acquire enterprise software: despite the fact that enterprise software often costs tens of millions of dollars. This book is for the company that is in the market for ERP, CRM, financials, or other enterprise software. Based on leading-edge research on enterprise software acquisition, this book presents a start-to-finish methodology for defining the needs, writing the RFP, evaluating vendors and consultants, negotiating contracts -- and maximizing payback. Whether it is a large-scale enterprise deploying CRM for the first time, or a mid-sized company automating its supply chain, IT and business managers face a make-or-break business decision, a decision-if wrongly made-that can sink a company. Acquiring Enterprise Software provides the world-class experience and methodology needed to dramatically lower the risks associated with this decision. The authors begin with an overview of the enterprise software acquisition process. They identify the key influences on the acquisition process. Then, through detailed case studies, they present today's "best practices".
Sample Content
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Table of Contents
1. Introduction.
Why Enterprise Software? The Implementation of Enterprise Software Solutions. The Enterprise Software Acquisition Process. Acquisition Team Formation. Acquisition Strategies. Requirements Definition. Establish Selection and Evaluation Criteria. Acquisition Issues. Marketplace Analysis. Deliverables. Influences and Critical Success Factors. References.
2. "Do or Die" The Case of International Air.
Organizational Profile. Background. International Air's ES Acquisition Process.
3. Detailed Analysis of The Case of International Air.
Planning Process. Information Search Process. Selection Process. Evaluation Process. Choice Process. Negotiation Process. Influences. Obsolete Systems. Y2K. Project Management Techniques. Technical Aspects of the ES System. User Community. Economic Factors. Support for Geographically Dispersed Global Operations. Single Vendor Solution. Business Process Reengineering. Vendor Demonstrations. Leadership. Competency. Interdisciplinary Nature of the Acquisition Team. User Participation. Past Experience. Characteristics and Critical Success Factors (CSFs). Lessons Learned.
4. Starting Point: Planning.
The Concept of Strategic Thinking. The ES Acquisition Planning Process. Interdisciplinary Nature of the Team(s). The Roles of the Steering Committee, MIS, Purchasing, and Users. Summary.
5. Request for Proposal.
Construction of the RFP. Terms and Conditions. Introduction. RFP Process. Current Organizational IT Infrastructure. Global Requirements. Types of Software Required. Process and Data Models. Interfaces. Future Systems Requirements. ES Solution Architecture. Technology Infrastructure. Technology Requirements. Functional Requirements. Implementation. Assumptions. Risks. Warranties and/or Guarantees. Intellectual and Industrial Property. Nondisclosure/Confidentiality Agreement. Acceptance Procedures. Miscellaneous. The RFP Responses.
6. "Even the Small Can Triumph" The Case of Keller Manufacturing.
Organizational Profile. Background. Keller's ES Acquisition Process.
7. Detailed Analysis of The Case of Keller Manufacturing.
Planning Process. Information Search Process. Selection Process. Evaluation Process. Choice Process. Negotiation Process. Influences on the ES Acquisition Process. Strong Management Commitment. User Community. An Aging System. Project Management Techniques. Economic Factors. Single Vendor Solution. User Buy-In. Business Process Reengineering. Leadership. Interdisciplinary Nature of the Acquisition Team. Cohesiveness of the Acquisition Team. Characteristics and Critical Success Factors (CSFs). Lessons Learned. Conclusion.
8. Information Search.
Information Search and Sources. Summary.
9. "Investigate, Investigate, Investigate" The Case of Energy Systems Corporation (ESC).
Organizational Profile. Background. ESC's ES Acquisition Process.
10. Detailed Analysis of The Case of Energy Systems Corporation (ESC).
ESC's Planning Process. Information Search Process. Selection Process. Evaluation Process. Choice Process. Negotiation Process. Influences on the Acquisition Process. Y2K. Obsolete Systems. Well-Known Issues That Arise During Implementation. Organizational IT Objective. Business and Technological Reasons. Economic Factors. Outside Consultants. Project Management Techniques. User Community. Capped Budget. Single-Vendor Solution. Integratibility of the Software. Business Process Reengineering (BPR). Vendor Demonstrations. Ease of Adaptability of the ES. Technological Preference. User Buy-In. Leadership. Y2K. Interdisciplinary Nature of the Acquisition Team. Competency. Characteristics and Critical Success Factors (CSFs). Lessons Learned. Summary.
11. The Halfway Mark: Selection.
The Selection Process. Summary.
12. Enterprise Software Evaluation Process: Vendor, Functional, and Technical.
Evaluation Processes and Tools. Single- or Multiple-Vendor Solutions. Other Vendor Evaluation Criteria. Functional Evaluation Criteria. Business Processes. Implementation. Role of the Technical Evaluation Team. Summary.
13. "Down to the Wire and Then, No Dice" The Case of Telecom International.
Organizational Profile. Background. Telecom International's ES Acquisition Process.
14. Detailed Analysis of The Case of Telecom International.
Telecom International's Planning Process. Present Status Assessment. Information Search Process. Selection Process. Evaluation Process. Choice Process. Negotiation Process. Influences. Geographically Dispersed Team Members. New Management. Economic Factors. Ownership of Code. Software Support for Geographically Dispersed Global Operations. Acquisition Team Composition. New Management. Final Authority Outside the Acquisition Team. Summary.
15. Choice and Negotiations.
Choice Process. Negotiation Process.
16. Influences, Critical Success Factors, and Lessons Learned.
Influences. Physical Location of the Vendor. Y2K. Performance. Ownership of Code. Organizational Culture. External References. Final Authority. New Management. User Buy-In. Integrated Single-Vendor Solution. Economic Factors. Acquisition Team Composition. Leadership. Past Experience. Steering Committee. Critical Success Factors (CSFs). Lessons Learned.
17. Conclusion.
Index.
Preface
Preface
This book represents a compilation of the knowledge we have gained both from our professional experiences and from the study of how organizations acquire complex technological solutions. The insights we have acquired from our vantage points as both vendors and buyers of information technology have been incorporated into this book. As for the study, it involved two Fortune 500 companies, one Fortune 1000 company and one medium-size company that had just recently purchased Enterprise Software solutions. The decision process they went through to choose the enterprise solution most suited to their organizational needs was examined.
We have written this book with several intentions.
First, our hope is that it will provide small- to medium-sized companies who are contemplating the purchase of Enterprise Software packages (also known as Enterprise Resource Planning ERP software) or other software such as Customer Relationship Management (CRMs), Manufacturing Execution Software (MES), and so forth, but who may not have the resources (whether expertise, financial, or other) necessary to help them in their decision process, with the appropriate guidance and direction that they need in this type of buying situation.
Second, we hope this book will provide large organizations, which may or may not have already been through the experience of trying to implement an enterprise solution, with insights that will make their next foray into Enterprise Software territory less problematic and less costly.
Another objective of the book is to raise the level of awareness of those involved, whether directly or indirectly, in this type of endeavor, to the point of recognizing the significance and importance of certain factors to the successful outcome of this buying task.
To this end, we present a process-end-to-end help, from planning to negotiations-that can be used for proceeding with the acquisition of Enterprise Software (ES) solutions or any other type of complex software. This process, based primarily on our own belief of how these types of purchases should be carried out, has been substantiated by four real world cases, each of which were in the market for different types of ES. These cases are included in this book.
The ES Acquisition Process and each of its constituent parts are described in this book in great detail. Numerous quotes have been included from participants in the Acquisition process which infuse additional insights into the whys and wherefores of the decisions that were made. With the help of this book and the points of reference that are provided, any organization, whether small, medium, or large, should be able to navigate through the process and arrive at a point of choosing the solution that is best suited for its needs.
Among the points of reference, we have included information on:
- forming the Acquisition Team, acquisition strategies and issues, defining requirements and criteria for the selection and evaluation of both the vendors and the software
- tips on what to watch out for during the search for information on vendors/software, the need for both positive and negative information, and the significance of a source's credibility and reliability on the overall acquisition process
- different types and levels of evaluations for the vendors and the ES, the criteria that are involved, and the questions that should be asked to determine the organization's requirements
- the not-so-easy resolution of a final ES choice
- a subtle yet effective "new" approach to negotiations, and software-related issues that are important in the negotiation process
- influences and critical success factors (CSFs) for software acquisitions
We have also included information that we believe will be of value in the construction of a Request for Proposal (RFP) for Enterprise Software. Numerous lists and examples have also been provided and are peppered throughout the book.
Sprinkled among the process chapters are the four cases. The format we have used for them is somewhat similar and this will be noted, especially when it comes to their accompanying analysis chapters. These chapters serve to highlight some very important elements of the ES Acquisition Process that we wanted to reinforce. Without getting into them now, it is sufficient to say that you will know them well by the end of this book.
Our book would not be complete without a discussion on the implementation of the software. Although not the focus of the book, we do touch on the critical issues that are pertinent to both the acquisition of Enterprise Software and its implementation. You will note that most of the issues that are critical to a successful implementation are issues that are addressed during the Acquisition process. And this, as we say, is as it should be.
The ES Acquisition Process is not an isolated process that is limited solely to buying-task-related activities (e.g., issue RFP, review responses, choose the least expensive system, sign contract, issue P.O., take delivery). Rather, its scope is quite broad and complex. In addition to the actual buying task, the Acquisition process involves many people, addresses numerous and varied enterprise-wide issues, depends on several key factors, and lays the foundation upon which the ES's subsequent implementation rests. While some evidence of the success of the process is apparent by the end of the Acquisition process (satisfaction with and user buy-in of the final choice of ES, for example), final judgement on the success or failure of the process will only be rendered when the ES is in the midst of implementation and subsequent to that, rolled out into production. With the weight, then, of these consequences and their far-reaching effects, it is easy to see that a great deal depends on the quality and rigor with which the ES Acquisition Process is carried out.
Whether this book is looked upon as a "how to guide" or as a "starting point" for the buying process, it should help to reduce some of the uncertainty that is associated with these types of buying decisions. Unfortunately, for some who would have wished otherwise and were hoping to find it in this book, we do not advocate any particular packaged ES solution. That is not the intent of this book. While some would have wanted us to render our endorsement of certain tier-1 or tier-2 solutions as the best ones out there, we have purposefully refrained from doing so. We firmly believe that no one is in a position to advocate one solution over another, regardless of the claims in the marketplace. It would also be a highly evident about-face from the stance that we have taken in our book. Throughout the text, we return again and again to the position that an organization needs to choose a packaged ES solution based on its needs. Put another way, the organization will need to appropriately match its needs with the capabilities of the software. Finding the right fit is critical. So while the claims and marketing hype might spout "We're #1," it might in fact be #2 or #3 or #4, and so forth, that would be best suited to your organization's needs. But, who are we to say? We don't know your organization. Hence, if we were to endorse any one or only a few vendors, it would not only be contradictory to what we are advocating, but it would also be a disservice to the organizations that would have purchased a specific ES based on our recommendation. That is just the opposite of the service that we are trying to provide here.
This book has been written for a wide range of business professionals who are or will in some way be involved with ES:
- For the business executives and senior decision makers who are or will be in the market for ES, whether for small, medium, or large-size companies, including:
- CIOs
- VPs of IT
- IS/IT Directors and Managers
- Department Managers
- Project Managers
- For the consultants, industry analysts, software vendors and their staff who are in some way connected with the sales of ES, as it provides an inside look into the buying cycle and the "contortions" that organizations go through when buying this type of technology.
- For curricula either at the College or University level in Marketing, Information Systems/Technology, and Project Management.
We have been told that this book is a veritable treasure trove of information that will enable readers to grasp the complexities associated with buying these types of systems. We have enjoyed putting it together and we offer it to you in the hope that it will serve you well.
AcknowledgmentsHaving begun this book at the tail end of Jacques' dissertation, we were coasting on fumes of exhaustion. Our gratitude, therefore, goes to our editor at Prentice Hall, Tim Moore, for his encouragement to "just have fun" with the book and let our personalities show through. His advice became our much-needed second wind that enabled us to complete our book in a timely manner. We would like to express our thanks to Dr. David A. Spuler for his review of our initial manuscript. His comments and suggestions were greatly appreciated and helped to spur us on to digging out more "gems" for the book.Our thanks also go to the organizations that agreed to participate in the research project. The knowledge that was gained as a result of the cases helped to substantiate our own beliefs about the Enterprise Software (ES) Acquisition Process. Thanks are also extended to the many people behind the scenes at Prentice Hall who were involved in bringing our book to market. Our thanks and appreciation also go to Becky Norlin, Renee Johnson, and the child care providers at MTU Little Huskies in Houghton, MI. They provided such good daycare for our infant daughter, Genevieve, that we were able to work worry-free on our manuscript.Our thanks and kisses go to our baby daughter, Genevieve, for being such an adorable distraction to the stress and constraints inherent with trying to bring a book to press. We would also like to acknowledge each other's strengths and contributions. This book represents a veritable team effort between us, truly a coming together of minds, to the point where it is hard to distinguish where the input of one of us ends and the other begins. The spirit of oneness from which this book was conceived is a testament to our unity as a couple, our belief in and our commitment to each other, and our partnership in life and in love. Last but not least, our deepest gratitude must be extended to that greatest of all Sources that fed us and inspired us when we had no more left to give. Thank you, Father.