Software Vendor Selection – Part 2 of 3

In Part 1 – Establish the Business Case [https://www.searchlightconsulting.co.uk/case-studies/identifying-new-epos-solutions/] we discussed how you establish the benefits case for your project – what sort of technology solution will enable your business to perform better and deliver a tangible improvement.

In Part 2 – Selecting the Right Solution we will look at how you find the right solution, how to consider the network of people who will deliver and support that solution, and then how to best to set about the formal selection process.

Part 2 – Selecting the Right Solution

Having decided to Buy rather than build your software applications, you now need to find the right application vendor.

2.1 Is there a ‘right’ answer?

No, there is no ‘right’ answer when it comes to choosing a software application. And if there is one which is ‘right’ now, it may not necessarily be ‘right’ tomorrow.

You can look at what your industry peers use, and read user and analyst reviews, but your business and your circumstances are unique. What is right for you is not necessarily right for others, and vice versa, what is right for your peers (and competitors) is not necessarily right for you.

Consider your software ecosystem

No application or business exists in isolation, and you should aim to build an ecosystem of applications that happily coexist.

Integration is key, and there are ‘clusters’ of applications that naturally work well together. They speak the same language.

Increasingly we see software vendors building their solutions with ease of integration in mind. Most modern SaaS (Software as a Service) (cloud) applications come with open APIs and the ability to ‘add-on’ or ‘plug-in’ other vendor applications that provide best-in-class or specialist services. Much of the hard work in implementing new solutions is getting them to talk to each other. If there are pre-built and proven integrations, this can save you a lot of time and money later.

You should also keep a close eye on mergers and acquisition in the software vendor market. Who is buying who? Will your key application vendors become one, and tighten their native integration? Or will they become competitors, creating greater friction and cost for you?

The ecosystem extends to the community of users, developers, implementation partners and support services. Will your selection improve over time as the community continues to develop and enhance the products? Will you benefit from innovation and compatible upgrades?

Established Vendors vs New Entrants

You’ve heard the adage that “No one ever got fired for buying XXX” – and there is a temptation to go for a solution from the big established vendors in your industry. It should be perceived as a lower risk, if top tier vendors have access to a ‘current’ talent pool, although you may pay a cost premium for these big top tier vendors.

However, this is clearly not the way the fast-moving software industry works. Old can get stale, and new entrants often drive innovation. The latest technology could give you the benefit of early mover advantage – if there is enough experienced talent to deliver the ‘new entrant’ solutions.

Often modern technologies arise from industry specific solutions which could be perfect for you, and too niche or too small a market to be adopted readily by the bigger tier vendors.

But newer vendor solutions are also risky. Innovative solutions are unproven. They may not match your geographic coverage, may not survive as a long-term viable provider, may not become an accepted part of your current ecosystem. With new vendors it may be harder to find enough people, with the skills and expertise you need.

2.2 Assessing the delivery risk

Often overlooked in selecting a software vendor is the importance of the network of people you will need to implement and maintain your solution.

People questions you need to consider:

Who will implement the solution? Does the vendor provide professional services, or do they have an established Partner network?

Is there an established skill set in your market? Or in your geographic region?
Will you use onshore, nearshore, offshore, or a mixture of each – and at what blend?
Do you have internal resources available? Will they need upskilling?
How does this impact the career path of your people? Both in your end-user and technology support teams?
Will the software you select keep your employees motivated? Is it new and exciting, does it provide a learning path allowing growth and professional development?

2.3 Do you need a formal selection process?

You may think you don’t need a formal process. You already know what you want, the answer is obvious, or there is already a preferred vendor, for any one of several reasons.

It’s true that in many cases a formal selection process can feel like ‘going through the motions’ just for the optics of being seen to do the right thing. And you can always manipulate your selection criteria and weightings to favour the answer you wanted all along, right? You can make a subjective choice appear objective.

But you should still do it. Even if you have ‘tuned’ your selection criteria, the scores still need to add up. The answer you arrive at needs to be transparent, with an appropriate audit trail to protect you and your business. And if the solution you want is good enough, then it will win anyway.

You might be surprised by the answers a robust selection process turns up. Your selection can be challenged and justified. Scoring can also make you rethink your selection. Why do you really want a particular solution? Are your reasons strong enough to withstand scrutiny?

And a selection process is not just about picking a solution – it is also a commercial negotiation, A formal selection process allows you to create a competitive bidding process, with commercial tension driving your vendor to offer best value. A well-run procurement process can achieve significant discounts both in license and service costs.

So how do you approach the selection process itself, agree the deal, and transition from procurement into a successful partnership for delivery?

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Software Vendor Selection – Part 2 of 3