Selecting the right supply chain execution software can be a monumental task, fraught with both opportunity and risk and it requires an organization to meticulously sift through vast amounts of information provided by software vendors, which typically include company history, financial structures, functional capabilities and technical specifications. To navigate this intricate process effectively and make the best decision, it is essential to follow a structured methodology, consider detailed plan requirements and execute a series of strategic steps.
Methodology
The supply chain execution system selection process must be planned with a clear understanding of the involved parties and the project scope; defining what is included and excluded from the project scope helps in painting a clear picture of the project’s length and required effort. It is crucial to involve the stakeholders who will be impacted by the implementation in the core team during the selection phase; allowing vendors sufficient time to respond is important, but adhering to firm timelines is equally critical.
Plan Requirements
To ensure the selection plan is tailored to find the right solution, it should focus on the specific needs of the client, which requires distinguishing between various types of requirements – functional, technical, security and performance – each serving unique purposes. Achieving the best result hinges on thoroughly understanding the client’s mission-critical needs, including future growth considerations and organizational aspects such as change management and training.
Short List
An initial Request for Information (RFI) and familiarity with the vendor landscape can provide a preliminary overview of the available providers’ capabilities before issuing a formal Request for Proposal (RFP). A detailed understanding of the client’s specific needs should guide the creation of the initial list of suitable vendors; it is imperative to treat all vendors impartially, ensuring they have equal access to information and opportunities.
Demos
To prevent demos from deviating from their purpose, they must be meticulously structured; sending out demo placeholders early to a defined audience helps in this regard. By scripting the demos, you can minimize the tendency of vendors to deliver sales pitches, instead focusing on the relevant application topics; it is beneficial to provide evaluators with clear expectations and scoring guidelines.
Evaluation
Scoring should be designed to identify the best-fit provider for the organization; relying on quantitative data points, from scores to costs and potential savings, can drive objective decisions. It is essential to focus on the currently available functionality rather than future roadmaps and to consider references from the provider’s existing clients.
Selection
Even if one provider appears to be the clear leader, narrowing the options down to two finalists can facilitate the selection of the optimal solution. Effective negotiation is key; understanding who will handle negotiations and identifying leverage points is crucial. The implementation team should be viewed separately from the selection team and it is important to take into account the time required to finalize the selection.
Contract Negotiation
Effective contract negotiation is paramount to building future success and several recommendations should be carefully considered. First, determine what license or subscription costs are based on, whether it’s the number of users – named or total – peak versus normal daily user counts or transactions such as LPNs or order lines. Ensure there are options to purchase additional user blocks at a discount as the business grows. Specify the number of customizations or modifications included in the base cost and clarify the inclusion of add-ons or bolt-ons like YMS, LMS, TMS, slotting and reporting.
Integration, conversion and add-on support should be included in the implementation services and service rates should be locked in for the project’s duration. Be vigilant about annual price increases in the Master Service Agreement (MSA) or contract and negotiate firmly regarding go-live payment fee expectations. Clearly outline the contract terms, ensuring there is an explicit out clause and establishing a resource resume and vetting process. Consider extended weeks of go-live support, ownership of data, intellectual property and extensibility code, as well as product training and user conference attendance. Lastly, negotiate the removal or extension of late payment fees or administrative costs stipulated in the MSA.
By meticulously following these steps and recommendations, an organization can significantly enhance the chances of selecting a supply chain execution system that not only meets its current needs but also positions it for future success.
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