In Part 1 of our “how to evaluate enterprise software” series, we looked at desirable qualities in software vendors and covered the basics like software capability, integration, price and ease of use. There were other qualities discussed as well like credibility, agility and innovativeness. Before you assess these qualities in a vendor, you need to have a list of vendors to evaluate. Part 2 is going to look at an effective sourcing framework to help you come up with the right list.
Sourcing vendors is half the battle and isn’t easy. Implementing the solution costs about twice as much to correct. Gartner says 54% of enterprise companies struggle to define a sourcing strategy and as much 59% end up renegotiating at least once.
Having a common sourcing framework may not be possible across the entire enterprise, especially since every department has unique requirements. Though that may sound daunting at first, if you break down your requirements into a quick 5 point checklist, it is possible to cover all bases in the broader sense.
1. Identify Your Areas Of Improvement
This could refer to addressing a problem or just improvements in general. Problems could be anything from overworked employees to a shortage in work staff. Both problem are easily addressable with some clever automation and a good software solution should not only free up your employees but also help you with the hiring process. Once you find your areas of improvement, you can further break them down into short term goals and objectives for specific departments. Tools are generally categorized by the departments that use them and now you’ve narrowed your search down to a specific category of tools and functions.
2. Get Everyone On Board
Recognizing the benefits of a solution are important, but what’s more important is to get executive buy-in to not only make a purchase, but also support its integration into your organization. You obviously want to get approval from the top first and a good practice is to compose a list of all the drawbacks of not using the software solution. For example, if you’re pitching a collaboration software, you would want to highlight the drawbacks of old fashioned spreadsheets and emails. Getting support on an employee level is no trivial matter either especially when you’re talking about changing the way people work on a day to day basis.
3. Assign Ownership And Create Accountability
Every stage of the project needs to have owners who are held accountable. Owners need to be assigned for budget, vendor sourcing and implementation. You also need someone to evaluate the outcome against what a successful adoption should look like. It’s good to have mix of people from across departments to eliminate bias and make sure teams collaborate more effectively.
4. Get An Outside Opinion
It’s easy to be close sighted with regards to your own company, industry and workflows, however what’s equally important is to know what the landscape of tools out there looks like. According to the CEB Sourcing Handbook, 66% of the 149 organizations surveyed spent more than 10% of their IT budget on outsourcing and contractors. This is probably because it’s difficult as in insider to have a holistic view of emerging technologies, vendor offerings and latest developments. Outsourcing helps you utilize external resources and specialists in the field of vendor evaluation to supplement your own internal expertise.
5. Prioritize Clear Communication
With regards to why vendor sourcing fails, the top reasons include strategic misalignment, basic miscommunication and a lack of true executive buy-in. Strategic misalignment occurs when both you and your vendor have different long term objectives and this is why internal evaluation and vetting the vendor are both equally important.
Miscommunication with regards to pricing and capabilities are fatal and can easily be avoided with good research. A lack of true executive buy-in could be on account of an all round initial enthusiasm followed by an absence of any active participation. This is why it’s so important that executive buy-in comes from the top and travels all the way through to the bottom.
Lastly, communication is key and it’s essential to explain to everyone on a ground level, the long term advantages involved with the changes happening and why they are so important for not just the organization but each and every person involved in the process as well.