John Moroney, VP, Sales, AssurX, Inc.
Editor’s Note: In this two-part series, you’ll learn the most effective ways to select an Enterprise Quality Management system, why it’s a critical long-term decision, and common pitfalls to avoid.
First, let’s simplify things a bit: Selecting an Enterprise Quality Management system is no different than any other major business purchase decision. Broadly speaking, that means you’ll face similar issues and risks you’ve encountered before.
So, if you’ve already got experience making big purchases, you should begin the process with a relatively high degree of comfort.
Unfortunately, most companies do not make major purchase decisions very often, whether buying an enterprise software system, purchasing or leasing a new facility or committing to a major piece of capital equipment. These decisions have long lasting effects and can be career enhancing or threatening for those involved.
With that in mind, let’s examine some proven ways to improve your selection process.
Having a plan is usually the best approach, but what should the plan include? Experience shows the best have several stages:
- Defining requirements & project objectives
- Initial investigation of options
- Detailed vendor reviews (not just product!)
- Defined project plan & costs
- Corporate approval and kickoff
Consider that this process will likely take several months, so one of the first steps is to set expectations within your organization. Explain to colleagues and superiors that this is like a major remodeling project. It has many steps, will require time and effort, and you only want to do this once, correctly.
Defining requirements & project objectives
It is surprising how few companies spend enough time defining the objectives and success metrics a new EQMs should deliver.
Start with the key business issues you want to address. For example:
- Is there an inability to understand the root cause of product failures? How big is the problem – quantity, dollar impact, lost customers, etc. Who in the company is affected? What are the KPIs (Key Performance Indicators), and what values would be considered excellent? How difficult is it to collect that information?
- What is the cost of supplier quality and how can that be reduced or charged back? Who are the best suppliers and the worst? What do they cost the company per year?
- Is it difficult or impossible to determine how many complaints are received by a customer? What were the reasons for those complaints? How many were resolved and how long did it take? Who would like to have that information, and what is it worth to the company?
Performing this exercise yields three outcomes:
- What constitutes success for this project?
- What are the potential financial benefits of the project and agreement on what the project investment should be (the budget)?
- What product/vendor capabilities are required to support the outcomes?
Although this stage of the project may be done by an individual, the creation of requirements should be based on interviewing all of the key stakeholders including users, managers and executives. A project selection team should also be recruited from these ranks and most often should include IT professionals as well.
Initial investigation of options
With so many options available, how can the team be sure to include the best choices? First, understand what the corporate ERP system vendor can deliver. Often this will be both the least expensive and the easiest to deploy, and at the very least should be evaluated to provide a base line to compare against other best of breed choices.
Some companies have a strict policy that no third party applications will be purchased unless a strong business case for not using the ERP vendor’s modules is first made. In larger companies, other divisions or business units may have already implemented an EQMS. Not only is there much to gain by interviewing those users, there may be corporate edicts or at least preferential pricing and implementation resources already available for deploying that product.
Other choices can be found through web searches, trade shows, etc. but one of the best approaches is to network with industry colleagues. Not only will you benefit from their experience, but to the extent their vendors have a focus upon your industry, best practices will be available to your team. Frequently, customers will have suggestions and possibly preferences for what system to select or at least a short list of what their other suppliers use.
Certainly one criteria at this point is cost, but another is whether to purchase the software or subscribe to a hosted solution. Some vendors offer both forms, but many do not, so part of the initial criteria needs to be settled with the IT organization and corporate policy.
Most companies will want to consider vendors with customer profiles similar to themselves, whether by size, industry, technology, etc. and/or a strong user group. For example, life science, aerospace and automotive companies have specific needs which will narrow the field of suitable vendors. It is important to engage the IT organization because there may be preferences for certain technology platforms such as Oracle versus Microsoft databases or integration to specific ERP systems.
How many vendors should be evaluated? It is difficult for a team to devote time searching for a vendor selection and “fitting in” their normal work; therefore most companies might interview six to ten vendors but whittle that down to three or five vendors for the next phase of detailed vendor reviews
Detailed vendor reviews
Now that your team has created a short list, it makes sense to take a deeper dive. Much of the focus at this stage should be the product functionality, and maybe “look and feel”. It is critical to establish criteria at this stage, as a “pretty” product may not be the best product available for your company. In the software industry a term frequently used is the “whole” product – not just the software. That would include, beside software functionality, elements such as:
- Support – uptime performance metrics, Level One support issue and response times, what is the support process and what are the metrics?
- User community – is there one, how active, who participates, is it vendor or customer driven?
- Industry domain knowledge – does the vendor know your industry and have support staff with experience. Does the vendor know how to work with companies your size and scope?
- Product reliability – how often do customers have problems, how severe are they?
- Implementation track record – how often do customers fail to implement? Why? Is there an implementation process?
- Vision and direction – is the vendor commited to being an EQMS, do they have a product plan and does their product and market strategy align with your company’s plans?
- Customers – who are they and do they align with your kind of company? Are they highly dependent on the vendor or can they support themselves?
- Total cost – beyond the initial project, what costs could there be in the future? Additional users, modules and/or changes? Is there a cost for future versions? What cost protections will the vendor provide? What are customer experiences?
Leading vendors understand the elements of the decision process and will be forthcoming with information. Successful sales people, who have participated in dozens if not hundreds of selection cycles, have a deep understanding of your industry’s best practices and the options in the market – usually much better than consultants or program managers who may lead selection projects only a few times per year.
Note: In part two, we’ll look at the most effective ways to “score” vendors, narrow the search process, and define project costs and scope.
