Software is for life...

Selecting an enterprise software package is rather like buying a puppy: it is not just for Christmas.

OK, it may not be for life, but after the initial fun of installing your new software, playing with it and getting it to obey your orders, you have plenty of years of looking after it until that trip to the vets.

Once implemented, software packages may be in place for 10 or 20 years, but in these busy times the focus is usually on the here and now: will it solve my immediate problem?

Given the actual longevity of systems, it is worth spending some effort in picking the right package.

Even if your initial software purchase is half a million pounds, you will undoubtedly spend several times this amount in internal effort and in consulting costs on the first project.

In the case of master data management, Information Difference surveys show that a project using software that cost x to buy will spend an average of 4x in effort actually implementing it.

Then you have maintenance costs, both of the software and the people side.

If we conservatively estimate 15 per cent support costs, then that initial piece of software costing ‘just’ half a million is actually going to set you back over £6m over a 10-year lifespan.

A couple of recent consulting engagements have shown me that many corporations have a lot to learn about the vendor selection process.

In both cases a systems integrator had been involved in helping draw up a shortlist, yet in both cases the shortlist was bizarre: vendors with entirely different strengths and track records in the relevant industries had been shortlisted, and some obvious candidates ignored.

In one case a vendor said to me privately: “Of the three shortlisted products, at least two of us are in the wrong place”.

Vendors can get put on a shortlist for a range of reasons: they happen to be an incumbent vendor at the customer in another area, the research into the market may have been sketchy, or a vendor may have an undisclosed relationship with the supposedly neutral systems integrator running the process.

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