Business Strategy: How to Evaluate New Software Systems for Your Organization
Missed Part I of This Series? You can find Part I of this two-part series here.
Taking the time to step back and evaluate your company’s publishing software can be challenging enough in the midst of the daily grind, but once you become aware that real problems exist, the bigger challenge can be figuring out how to successfully address them. Part I of this article explored “the decision phase”—or, how to recognize the need for a new system and the triggers that alert you to that situation. In this second installment, you will learn ways to analyze, select and determine the success factors key to the process.
The Analysis Phase: Evaluate Your Business Needs Against the Existing Environment
Once you conclude that a deficiency exists within your information framework, the next step is the analysis phase. A software study should be launched as a major initiative with three likely outcomes:
• A decision may be reached to move forward on all or part of the recommendations of the study team;
• The study provides useful information for re-engineering internal processes that the business feels will take care of the information deficiencies;
• The study is completed, and no action is taken.
Step 1. Get senior management buy-in.
The first step in the analysis phase is to make sure there is senior management buy-in and that an executive “sponsor” is selected. He or she must then put together a study team comprised of representatives of key departments. Each team member can gather information from the end users in his/her department as to which applications are working well for them and which are not. Multi-departmental study teams that meet regularly during the analysis phase often come to a new understanding of their individual functionalities as they see the repercussions of their functions across departmental lines. They also gain a broader understanding of other departments’ needs and the impact of those needs on their own.
This phase has three primary goals:
1. To determine what kind of information can and cannot easily be extracted from the system(s). For instance, what were our total sales to Amazon for 2007 by month and by product channel?
2. To determine why information is hard to obtain. Is it a technical issue or perhaps inadequate IT staff training? You may find, for example, many issues are a product of servers or files that do not/cannot communicate with each other.
3. To determine which processes (automated and manual) work and will work going forward. It is possible that, even with explanation, current processes are hard to follow and will need to be re-engineered. It is also possible that they may, in their simplicity, easily provide a manual road map to automation.
This phase of the software evaluation project is the most crucial because:
• Decisions based on the analysis are used to define the project’s overall scope.
• The analysis can provide management with forward-planning options to phase in any systems envisioned for larger projects over multiple financial years—easing the cash-flow burden to some extent.
• It will clearly define the age of the current technology and whether it will synergize with the new technologies.
• It sets the stage for “Proof of Concept” testing, which may be comprised of various business scenarios that surface during this phase.
A thoughtful analysis can, in the long term, save substantial investment dollars and predict a realistic project time line.
The Selection Phase
Within the selection phase, a number of options exist.
Step 1. Identify software solutions best-suited to address the problems you’ve identified in phases 1 and 2.
This can be done in a variety of ways, but the best way is to talk to your peers and check Web sites such as Capterra.com and KensailTD.com.
Attending events such as the Publishing Business Conference & Expo, held in March each year (March 23-25, 2009), Book Expo America, and other key publishing conferences will put you in touch with those who can help you, whether your need is a full-solution system or software specific to a functional area, such as a warehouse module or digital asset management module.
In essence, you have three choices when selecting software:
1. You can upgrade your existing applications.
2. You can replace all of them with new software that provides better integration of what you have and need, and adds functionality.
3. You can replace some of your software and upgrade other parts, creating a hybrid.
You can do this in two ways:
1. Develop the software in-house or outsource it to a firm with expertise in your type of business.
2. Buy the software from a vendor.
Purchasing software once was fairly simple—you purchased an application, and it was installed on an in-house server and managed by your IT staff. There was a time in the not-too-distant past when software was not locally installed, but used on a large, central server as a “time share” that accepted certain code strings to retrieve the information. Today, time share has morphed into an acronym SaaS—Software as a Service. In essence, it means that your new software no longer resides on-site, but rather in a vendor-hosted environment. That does not, by definition, imply the host server is in the vendor’s office (which can happen and which is not good), but in a highly secure data center linked to your site via the Internet.
The option to migrate your business applications to SaaS has the following pros and cons:
• A lower cost of entry and initial ownership.
• Less overhead expense, as new hardware need not be purchased and older hardware need not be upgraded.
• SaaS systems are always on the latest version—to avoid upgrade headaches.
• New functionality is available when it is introduced by the vendor.
• Backups and business recovery are the vendor’s responsibilities.
• IT support is mitigated by not having to install and manage infrastructure.
• SaaS vendor security and service may not provide rock-solid recovery in case of failure.
• Your organization’s internal network bandwidth and Internet bandwidth may not support current business activities, such as sending large files to vendors.
• Integration with other local applications may be difficult.
• Highly customized modifications may not be easy or available.
If purchasing from an outside vendor, ask questions such as:
• Does the software meet your needs and provide the functionality you want? Is it compatible with your current systems, or will you have to replace them?
• Is the prospective vendor responsive and does he ask about your business rather than tell you about his? How is the vendor’s follow-up?
• What support is offered? How long does it take to get to your request?
• What hardware needs are there for the software? Will your current hardware support the new software or do you have to upgrade/change your servers and/or other equipment to suit?
• Does your IT staff need to be retrained? What is the time line for proficiency?
• What is the cost of the new software, hardware, support, and what ancillary costs are there such as modifications defined in a gap analysis between the old and the new systems, data-conversion expense and vendor-consulting estimates?
• Do you have in-house staff capable of managing the project from your side?
Step 2. Evaluate critical success factors.
When taking on a software analysis, you must ask: What ultimately constitutes success for the project? There are a number of possible answers:
• Software is purchased and installed, and is satisfactory.
• The project comes in within budget and within an acceptable time frame.
• Management’s and end-users’ needs are fulfilled.
• The native culture of the company is not compromised, but enhanced.
• The problems that drove the software search are resolved.
• The organization is generating information in a timely and effective way that allows it to position itself better against the competition.
Keep an Open Mind
Given the key decisions involved in determining whether your company needs a new software system, it is wise to ensure that everyone involved in the process understands that the transition to a new system will be a long-term project that demands significant monetary and human resources.
It also demands the understanding from users that the new system will be different from the old—that the way people do things today may differ from the way they will be done in the future. Such understanding is not easy to achieve, but it is essential. Management must think broadly and be open to change, while at the same time encouraging their user community to do the same.
What works today may not be the best way to approach problems nor is it a basis for selecting new business applications. The future demands innovation, not replication. And innovation demands an open mind—and perhaps a new software system.
Thomas Woll is president of Cross River Publishing Consultants Inc. (PubConsultants.com). Linda Garfinkel is president of Media Consulting Services.