Post on 31-Dec-2015
Information Technology Information Technology Project ManagementProject Management
Buying Packaged Software: RFPs and Vendor Selection
Why create software when Why create software when you can buy it? you can buy it?
Many times, the best solution is to buy packaged software
Often begins with the development of a Request for Proposal (RFP)
Detailed list of questions submitted to vendors
RFP
What Should an RFP What Should an RFP Contain?Contain?
Key dates in the proposal process– RFP release, proposal due date, proposal
evaluation, and so forthContact information
– Who the vendor may contact and how communication should be done
Information about your business and your requirements
Criteria for Evaluating Vendor Criteria for Evaluating Vendor Software PackagesSoftware Packages
Financial viability of vendorOther vendor characteristicsContract terms and conditionsOpinions of other users of the packagePackage characteristics
Financial Viability of the Financial Viability of the VendorVendor
Does the vendor have sufficient capital/surplus to meet its on-going obligations and to absorb any unexpected financial losses?
Does the vendor have any contingent liabilities (e.g., lawsuits) that could adversely affect its financial condition?
Has the vendor achieved profitability from its operations?
Is there a concentration of revenue in one or relatively few customers?
Other Vendor CharacteristicsOther Vendor Characteristics Does vendor provide timely on-site and/or
telephone support? Does vendor track user questions/problems? Does vendor adequately test new products and
releases? Does vendor have sufficient knowledgeable staff? Does vendor provide quality training and
documentation?
Contract Terms and Contract Terms and ConditionsConditions
If source code is not a deliverable, will it be maintained at a third party location (e.g., bank vault), and be made available in the event the vendor goes out of business?
Is the timeframe within which the vendor is required to respond to problems/questions clearly defined?
Is the extent of vendor support, training, and documentation clearly defined?
Contract Terms and Contract Terms and Conditions cont’dConditions cont’d
Is the timetable for all deliverables and payments clearly defined?
Has a favorable relationship between deliverables and payables been negotiated?
Are all costs clearly defined? Are there penalties if contractual agreements are not
met by the vendor? Does the contract allow for in-house use of the package
for acceptance testing purposes prior to purchase?
Opinions of Other Users of Opinions of Other Users of the Packagethe Package
How satisfied are they? Would they purchase it again?
How responsive is the vendor to problems?Is the system easy to use?What kind of conversion/implementation
problems were encountered?How difficult is it to interface the package with
existing systems?What other products were considered and why
did they select this one?
Package CharacteristicsPackage CharacteristicsDoes it provide the needed functionality?Is it easy to use?Is its design flexible enough to allow changes?Does it have good documentation and help
screens?Does it use current but proven technology for
which support is available?Does it include appropriate control features?
Pros and Cons of Packaged Pros and Cons of Packaged SoftwareSoftware
Pros Cons
Remember: Customizing Remember: Customizing Packaged Software Drives Up Packaged Software Drives Up
Total CostsTotal Costs
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Project Management Project Management Challenges RemainChallenges Remain
Just because you buy software or enter into an outsourcing arrangement doesn’t mean that you can count on the vendor to manage the project
Requirements still have to be determined and system still have to be implemented along with accompanying organizational changes . . . And these are the two key areas where project often go awry
The same project management principles apply