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

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?

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