Friday, October 29, 2010

Selecting the Right Application

You've decided it's time to upgrade one of your core business applications - but where do you begin??

Many organizations immediately jump to solutioning without identifying what their true needs are. They decide the best alternative is to upgrade their existing system, or purchase a net new system, and then enter into negotiations with a vendor of their choice. While this may be an alternative, it may not be the best - or most cost effective approach for selecting a new application.

Identify Current State

Many businesses believe they have a pretty good understanding of their current state. They look at their existing business processes and quickly determine they are either too labour intensive or inefficient, and can be improved upon. While the business may 'intellectually' have a good understanding of their business, without documentation it becomes virtually impossible to communicate to a perspective vendor exactly what they want to improve. Any vendor engaged at this point is left to make assumptions - which inevitably lead to misinterpretations of facts. Organizationally, take the time to determine exactly what your current state is so you have a baseline on which to build.

There is another benefit you will recognize from this effort - although it won't become apparent until later on. Undocumented gaps in your processes will be accentuated when a new application is installed. You can be assured your staff members are relying on their own workarounds with the existing system – workarounds you may not be aware of. These undocumented shortcuts are precisely what will cause the most angst later on, as they will get missed during the requirements gathering stage and won't surface again until a new application has been installed – when those opportunities to side-step process are no longer available.

Analyze Current State

It is critical to not only document your current state, but to also take the time to analyze what the information is telling you. Does your analysis indicate there is a significant opportunity for improvement? If so, in what areas – and what changes need to occur to improve your overall business performance? Taking the time to analyse your current state may seem like you are not making progress towards changing out your present system - but in fact you have begun down a path that will greatly improve the chances of your organization making a good purchasing decision that will meet your future needs.

Identify Future State

You now have a pretty good handle on what opportunities may exist - it's now time to 'blue-sky' your future state. Consider what your business could look like. Which opportunities must be addressed to improve efficiencies, output or capacity? What types of technology is currently available in the marketplace that might fulfill those requirements? What are your competitors doing? These are critical questions to ask - as this step of the process will start to define your requirements.

Every step you take after you have identified your future state builds upon the previous steps - adding a new level of granularity. This approach defines what the requirements must look like to fulfill your future state vision. In other words, at the end of this process if you take the lowest level requirements and roll them up into what the system will look like - it should match your future state vision. This top down approach provides more clarity than starting at the bottom and working up - which is essentially what you are doing when you jump to solutioning without first taking the time to identify your needs.

Document Business Requirements

You've documented your current state to ensure everyone involved has a sound understanding of your business processes, reviewed business processes to determine if you have any undocumented gaps that need to be addressed, spent time analyzing what your current state looks like and where there are opportunities for improvement, and finally defined your future state. Congratulations - you are now ready to start documenting business requirements.

Evidence shows that around 70% of all projects fail to meet their objectives. Many believe a lack of clearly defined requirements is the cause. While this statement is 95% true, it is critical the sections outlined in this blog entry up to documenting requirements are implemented first. You can only effectively document requirements if you have a good understanding of what those requirements are in the first place. Spending time on the sections previously discussed prior to proceeding to the requirements gathering phase will drastically improve your likelihood of a positive outcome.

Complete an RFP

Business requirements will feed into the RFP (Request for Proposal) process. An RFP is a document outlining your requirements that asks a vendor to propose a solution they think will meet your requirements. They may propose their base application(s), their base application(s) with some minor configuration adjustments, or their base application(s) with entirely new modules written to support your business. The possibilities are endless as to what they might propose, but keep in mind if the requirements aren't clear enough for them to understand what your organization requires, the possibility of the proposal hitting the mark decreases dramatically.

Don’t cut corners at this stage of your application selection process. The more information you can give them up front - the increased likelihood the vendor will provide you with a proposal tailored to your needs.

If your organization is unfamiliar with the RFP process, talk with a professional management consultant prior to proceeding. RFP's have contractual obligations that must be clearly understood prior to releasing an RFP to limit your liability.

Make an Informed Decision

You are now ready to make an informed purchasing decision. You have identified and analyzed your current state, defined what your future state will look like, documented requirements to align to your future state vision, and solicited feedback from vendors. Scoring of the RFP will assist you with making the right decision. The next step - implementation.

If you would like to discuss any of the topics this blog entry addresses, please feel free to contact Innovalign at

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