Ways of Finding Software Vendors: The Pro’s and Con's

  • Written By: Joseph J. Strub
  • Published On: July 2003



Introduction

The most frequently asked follow-up question to my article, Software Selection: An Approach, was How do I find potential software vendors? Obviously, this is a critical question if the objective is to identify the best software solution to satisfying the business requirements of your company. The good news is that, before the Internet, you could go blind performing a search of the literature. The bad news is that, even with the Internet, you could still be searching for the proverbial needle in the software haystack. This article discusses four sources and methods for identifying software vendors and the pro's and con's of each approach. These methods are the Internet, the competition, industry trade groups, and selection services. While there may be others, this group of methods should give you plenty to think about and allow you to draw some logical conclusions as to which method works best in your situation.

Internet

Assuming that you already have access to the Internet, an Internet search is the quickest and cheapest way to find potential software vendors. Well, that's it for the pro's. Let's face it, who controls what you read or find to the Internet? Typically, it is the information contained on the vendor's website, which is placed there by the vendor. Then, you have to contend on strategies employed by the search engines in ranking the results. Even with vendors being identified, you must sift through the rhetoric and over-hype to determine what is relevant to your company.

At best, an Internet search will provide some idea as to how daunting of a task lies ahead of you. But you still have much work to do before qualifying a vendor to address your company's critical business needs. Use the results of the Internet search to help you plan and scope out the level of effort that will be required to complete the software selection project.

Competition

On the surface, your competition may appear to be an unlikely source for advice. Your competition may try to deliberately mislead you, sending you down dead end paths working with unscrupulous vendors. These are the negatives for relying too heavily on advice from your competition.

However, the savvy business competitor realizes that there is safety in numbers. This type of competitor realizes that he may have an ally in getting a vendor to work on future enhancements and support issues. It is surprising on how often your competition is willing to share advice. It is also not too surprising how often that your competition is willing to share mistakes or poor decisions made. Consequently, using your competition depends on your ability to judge human nature and not the nature of your judgment. If my experience is any indicator of reliance, the results can be a pleasant surprise.

If possible, the use of this method should be done in a face-to-face setting and you should allow for travel expenses as may be necessary. Typically, the greater physical distance between competitors, the more likely a competitor is willing to share information. A meat distributor on the East Coast is more likely to discuss his experiences with a distributor on the West Coast rather than one in an adjoining state or region. Who knows; you might be able to return the favor in the future and develop a valuable relationship.

Industry Trade Groups

Typically, every industry has a trade group or association. Whether it is the ATA (no, not the American Trucking Association, the Association of TEC Authors), you can find a trade group that is dedicated to promoting your principal industry. And typically, they maintain a database on a number of topics, one being software support. This is the good news. Your company probably already belongs to a trade group and has designated a point of contact, most likely in your sales department. Consequently, the cost of membership has already been incurred and will not be additional expense attributable to your project.

The bad news is that maintaining a database of software vendors may not be the primary business function and purpose of your trade group. Consequently, their data may be outdated, incomplete, or both. Using data from a trade group as your sole source of data can be a serious mistake. Again, significant research must be performed as to the reliability of the data. If the trade group has a dedicated individual or staff to perform this function, this is a good sign. If this function is simply a collection of marketing brochures, this is a bad, a very bad sign. Before considering using a trade group as a source of information you should ask the following questions:

  • How often is the data updated?
  • When was the last time the data was updated?
  • Is the data independently confirmed by the trade group?
  • Have other members used this service and can you talk to them about their experiences?

Selection Service

Assisted by current knowledge bases of process features and vendor attributes, a selection service's primary mission is to systematically match a company's requirements with vendors' capabilities in order to identify the best prospective software vendors. However, with the service comes a cost. This can be perceived as the negative. The cost can be several hundreds of dollars or several thousands of dollars for a single use of the service. Consequently, you need to overcome this negative by verifying the service can get you to your objective, namely prospective software vendors, is the least amount of time. In so doing, the expense of the service can be offset by less internal resources dedicated to your project. If not, you probably need to consider some of the less costly alternatives.

When choosing a selection service, there are basic criteria that you need to verify. First, the service should encompass your industry. If you are looking for software to run a saw mill, you may be out of luck. However, if you consider a saw mill part of the process industry sector and the selection service covers this marketplace, your options are improving.

You should expect a service to cover the major industry sectors such as chemical, consumer products group, and automotive. Within these sectors, it is also reasonable to expect to find a further segmentation by software functionality such as enterprise resource planning (ERP), supply chain management (SCM), warehouse management systems (WMS), customer resource management (CRM), and enterprise asset management (EAM).

At this point of the discovery, you should know that the selection service covers your industry and related software that you are seeking. You should also be feeling good about the service. Typically, a service should allow you to:

  • Rank the importance of function areas such as finance, production, and customer service.
  • Select the required functions and features by area (i.e. financials, production, customer service).
  • Rank the importance of functions within each area.

Once this is done, the service is able to match your needs and requirements against its database of vendors. It will then suggest potential vendors appearing to meet the business needs of your company. Obviously, this should be a repetitive and iterative process that is refined as rankings are changed and weights are reassigned. The process is continued until the project team is confident that the model reasonably and accurately portrays the company's business practices and needs. For the saw mill owner, you should be able to enter free form requirements in an attempt to isolate specific and, perhaps, unique requirements.

How does all of this work? In a gross simplification, behind the scenes there are databases that maintain functions and features by industry by software component. Correspondingly, there are databases of software vendor capabilities aligned along the same lines. After you have updated the functions and features according to your needs, rankings, and weights, the two sets of databases are matched to find vendors who best meet your criteria. The algorithms and modeling techniques used to complete this best match tend to be sophisticated and rival those used in advanced planning and scheduling.

At this point of using at selection service and based on previously entered data (selecting functions and features, assigning weights, entering unique requirements, etc.), you can automatically produce a request for proposal (RFP) to be issued to the short list of vendors. Or, armed with this information, proceed to the vendor demonstration to confirm the results. Regardless of which plan of attack you take and as stated by myself and other authors, the RFP should be part of any contract signed with the vendor.

The diagram below graphically depicts how the use of a selection service can compress the time it takes to identify potential vendors when compared to more traditional methods.

This all sounds good and a selection service can get your company to its objective quicker and safer than other methods. However, there is word of caution. You and your company must perform its due diligence to confirm the vendor data maintained by the service has been independently verified and not a reliance on a vendor's marketing cache. A word to the wise should be sufficient.

Summary

As you can see from the above discussion and as the adage says, You get want to pay for. When selecting software to manage and grow your business, cutting fiscal corners may not be the most prudent way to answer the software vendor question. The selection quadrant below provides a quick recap of the analysis discussed in the article.

Whether you choose the quick and easy Internet search or the unbiased and thorough selection service, you still have more work to complete before signing the contract. However, if you can justify the expense of a selection service, you can get to the finish line and enable your company to take advantage of software advances sooner rather than later. Watch for groups that regularly review software and vendors since they tend to be a good source of information regardless of which method you select.

If you have used other methods or sources for identifying reliable software vendor, send me an e-mail relating your experiences. As many of you, who have already corresponded with me, know, I respond to each e-mail personally and promptly.


About the Author

Joseph J. Strub has extensive experience as a manager and senior consultant in planning and executing ERP projects for manufacturing and distribution systems for large to medium-size companies in the retail, food & beverage, chemical, and CPG process industries. Additionally, Mr. Strub was a consultant and Information Systems Auditor with PricewaterhouseCoopers and an applications development and support manager for a Fortune 100 company.

He can be reached at JoeStrub@writecompanyplus.com.

 
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