The software industry, including maintenance services, are set
to be the strongest sector of the information technology market
with spending predicted to hit $229 billion dollars by 2010.
Therefore in such a saturated, competitive and strong market how do
you find the right supplier for you and your business? Each
supplier has their own set of USPs, accreditations, partnerships,
products and services to try and stand out from the rest of the
pack. So the questions you may ask during the procurement process
are: who is right for the business and understands our
requirements? Have they had experience in the sector backed up with
a proven track record? Who else do they work with? These questions
are just the tip of the iceberg when making such a big business
commitment. The following guide has been put together to help you
through the process and point out what to look for in a
supplier.
Process
Software
development is inherently risky and so it is important that
your supplier, whether of a package or bespoke software, uses rigorous
project management techniques and follows a good quality management
system to reduce risk. A formal process which imposes control
for the Project Manager is far safer than say a more creative
approach adopted by smaller companies - it is essential that a
partner is sourced who is large enough to apply engineering
disciplines to a project because the majority of effort (and
therefore risk) will be around the technical software
development. The process utilised should be tried and tested
and have accolades against it by delivering successfully.
Even if you expect to buy a package the best practice is to
formally document your requirements and then evaluate all candidate
products against them. This gives you a much brighter
spotlight to interrogate each supplier - make sure they don't offer
bland platitudes but have to specifically itemise which parts of
your requirements their product doesn't satisfy out of the box.
Technology
The actual technology used to write the software should be
modern, not necessarily the latest, and should be widely adopted so
it is easily supported if the company who originally designed the
software happen to disappear for any reason. The first and perhaps
most important decision is whether you want proprietary software
from makers such as Microsoft or Oracle or open source software. A
lot depends on your existing IT Strategy, any in house skills, the
application you want to run and
your budget.
Enterprise size or smaller but business critical systems should
be developed using well known technologies to ensure their
longevity, upgradeability, security and reliability. There's no
point having a whiz bang new system to run your business if the
only person your supplier can find with the skills leaves their
employment.
Security & Data Protection
The weakest point in any security system is the people, and IT
systems are no exception. Therefore the management processes
and controls you impose on your own staff should be mirrored by the
vendor of any software you buy. What's the point of investing
in heavyweight security to protect your network and valuable
business data if the supplier is happy putting it all on
unencrypted laptops left in their staff's cars? After recent
high profile cases the legal obligations for data protection are
likely to be significantly tightened over the next few years.
Would you want your business to be the subject of "data loss"
headlines?
As it becomes more common to buy so called 'Software as a
Service' (SaaS) whereby the supplier gives you login access to a
web-based hosted solution, they take control of your precious
data. What would happen if the supplier went bust?
Could you get the data back from a liquidator? You could
severely hamper your business so make sure you have a mechanism to
regularly take backups. You could also breach the Data
Protection Act unless you ask about where the data is stored and
how it is handled and protected.
Track Record
Reassurance by a proven reference-able track record can speak
volumes in helping with the decision making process. Knowing that a
supplier has past experience of delivering similar projects on time
and on budget, backed up with supporting testimonials from their
clients will settle your nerves knowing that you are going into a
partnership with a tried and trusted, but also highly experienced
development company. We all know that suppliers will only
offer you referees who are likely to say good things, so delve deep
to really test their mettle: make sure with the referees that the
supplier followed the same process and used the same technologies
as they are offering you. Ask about their experience of the quality
of the software, ease of use and total cost of ownership (see
below).
Collaboration
To work in conjunction with your supplier rather than battling
with them continuously will inevitably be more beneficial to the
project. Finding a company to collaborate with you rather than
imposing a solution on you will mean you are delivered what you
need.
Whether the solution required can be obtained from a package or
if it needs to be written from ground up, they both have the common
need for the software to satisfy your business's requirements to
provide a solution that exactly matches your needs and delivers
competitive advantage based on the business processes, within the
allotted budget.
Financial Stability
You should be nervous about investing a large amount into just
any company, especially if a) you haven't worked with them before
and b) if this is the first major project of this type for your
business.
Software, especially bespoke applications, does not come
cheap and therefore you need to be assured that your money is safe
i.e. is the supplier financially stable and established. Most
suppliers operate transparently so it should be possible to obtain
all the potential vendors' financial reports from at least the past
3 years. If they don't then you must ask yourself what are they
trying to hide? Carry out whatever credit checks you would on
any key business partner or customer.
Most Economic?
It's not always the case that the most economically advantageous
solution is necessarily the best for your business. Budget is
always a major consideration but so should be quality. It is easy
to go out and source the cheapest solution but over time this could
end up costing more and more. If the solution is business critical
then downtime will cost the business dearly and the cost of fixing
it or enhancing it to meet changing needs may be much higher.
Always measure the total cost of ownership not the up front
cost.
As with most things the phrase "you get what you pay for" can be
associated with software and business systems projects.
Finally - Intellectual Property Rights
The final point is more associated with bespoke systems rather
than off the shelf software. It is imperative that you negotiate a
formal contract that hands over the ownership of the Intellectual
Property Rights to the system and that you obtain the copyright to
the source code as this is more beneficial to you than any escrow
agreement. Any reputable supplier should be willing to give you
what you pay for after all.
It is painful how often the media contains stories of software
disputes arising due to the lack of a formal contract and
assumptions having been made by both sides over who owns the
software.
A package or product supplier is very unlikely to surrender
their intellectual property rights or source code due to their need
to sell it to many customers. Instead, ask your trusted
lawyer about an escrow agreement for the source code, but remember
to consider the data as well if the software isn't on a computer
that is under your direct control.
Buying and sourcing software from a supplier doesn't have to be
as daunting a task as it can appear, or one that ends up wasting
time and money. Preparation is the key; if time is spent at the
beginning researching all the exact requirements that the system
must perform then this will aid you in talks with suppliers, as
they will know precisely what you are looking for. It may be worth
using a professional procurement consultant to help you.
Finding a supplier that fully understands your business and
requirements and one you can envisage developing in to a long
standing business relationship will also make the process and
communications a lot smoother; ideally you can view them as an
extension to your business.