Software Vendor Selection – Part 1 of 3
At Searchlight we believe in helping business run even better, by leveraging technology to drive business improvement.
While technology alone rarely delivers transformational change (you also need to address People, Process, and Information dimensions), starting with good technology – the right software solution for your business – can be a powerful enabler for positive change.
In this blog series we explore key considerations for selecting a software solution in three parts:
- Part 1 – Establishing the Business Case: How to build a solid business case for your project and identify the technology that will deliver tangible benefits.
- Part 2 – Selecting the Right Solution: How to assess the right solution, engage with the network of people who will support it, and approach the formal selection process.
- Part 3 – Establishing the Partnership: How to manage the selection process, negotiate the deal, and transition from procurement to a successful delivery partnership.
Part 1 – Establishing the Business Case
1.1 Understanding Capability Gaps
It may sound obvious, but the starting point for any business change initiative should be to fix a known problem, not implementing technology’s sake. As the saying goes, “If it ain’t broke, don’t fix it!”
Conducting an operational capabilities review will help identify the most impactful issues that hinder excellence. What is stopping you from being excellent in any given area of your business? Once the problem areas are identified, potential technology solutions can be mapped to address them.
Typically, this is part of the business planning process – aligned to your 1-, 3- or 5-year business plans and your overall goals.
Key questions to consider:
- What are your business objectives?
- What capabilities are needed to achieve these objectives?
- How can technology initiatives support these goals?
New product or service introductions can also drive the need for technology solutions. In such cases, assess whether existing processes can be adapted or if a complete step change is required.
1.2 What sort of technology solution do you need?
Once you’ve identified the areas where technology can enhance business capabilities, the next step is to determine the type of technology solution required.
Consider the following options:
- Enhancing existing platforms: Leveraging your current assets (people, knowledge, and software) can be a cost-effective, low-risk approach. Sweating your current assets is a low-risk approach and many application suites are modular and allow for easy expansion. This can also be very cost effective – a chance to renegotiate end user license agreements and retire unused elements of your existing estate.
- Bespoke development: If your business case depends on you having a unique capability, and therefore a unique technology solution? If so, you may need to have in-house development capability or find a developer who can build (and maintain) a bespoke solution for you. However, this approach can introduce higher maintenance costs and create dependency on specialized expertise, which can limit flexibility and scalability in the long run. It’s crucial to carefully assess these risks and ensure that the benefits outweigh the potential downsides.
- Off-the-shelf solutions: Most business challenges have already been solved through existing platforms. The challenge is selecting the right one. Options range from Tier 1 vendors (e.g., SAP, Oracle, Microsoft, IFS, Salesforce) with global footprints to Tier 2 solutions which offer robust functionality and flexibility, often catering to mid-size enterprises or industry-specific needs. There are also niche solutions tailored to specific industries and regions.
Deciding this will be your entry point to starting vendor selection and will allow you to produce a clear specification for vendors to respond to.
1.3 Confirming the Business Case Benefits
With a clear understanding of the problem and the technology solution in mind, you can now establish the building blocks for transformative change.
A well-applied technology solution should be mapped to:
- A business change initiative
- A measurable benefit
- An overarching business objective
.
e.g. Benefits realisation is a whole topic in itself, but suffice to say benefits do not just happen – they need to be defined, managed, owned, and measured. If a benefit cannot be measured, does it really exist?
Moreover, some technology platforms are “gifts that keep on giving.” Flexible, expandable solutions can evolve to support future initiatives and unlock unforeseen value. This is one of the key advantages of choosing a “Buy” strategy over “Build” when selecting software applications, as you benefit from the collective innovation of an entire industry.
With a solid business case and defined technology approach in place, the next step is finding the right vendor – which we’ll explore in Part 2.
Link to Part 2 – Selecting the Right Solution
Contact us today to learn more about how Searchlight Consulting can help with your software vendor selection.
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