New Software: Roadmap and Approach
When assessing investments in multiple systems, there are not only business drivers, as mentioned earlier, but also systemic dependencies to consider. A key consideration is the sequencing of new systems. For example, does master data need to be “fixed” and stabilized as the foundation for new features and functions? Does planning come before foundational systems?
This is where the development of a roadmap – understanding the company’s biggest technology hurdles, strategic direction, dependencies, “burning platforms” and other investment priorities – comes into play. Essentially, answering the question: How long can we continue leveraging our existing solutions and remain viable and competitive?
Developing the roadmap helps the company clearly understand how they will move from their existing legacy environment towards a more strategic technology platform. It helps manage expectations on sequencing, as well as rationale and options for timing. This serves as an initial input to investment prioritization / capital budgeting, resource deployment needs and change management activities. For each system under consideration, a high-level business case must be developed to assess the required investment and expected return (ROI). This should take into consideration existing costs that will no longer be required as systems are sunset, as well as an understanding of concrete benefits. Understanding the ROI drivers for each system also impacts roadmap sequencing decisions and the company’s appetite for capital expenses versus ROI.
Recognizing that the development of the business case is sometimes difficult prior to going through a full package selection process, we again advise leveraging the experience of an objective third party who can provide insights into “real” costs and benefits. Relying on solution vendor sales pitches and collateral will typically result in portraying an unrealistic picture of costs and ROI.
Once the roadmap is defined and accepted, the company can then begin the process of selecting new systems. In another Parker Avery Point of View “A Strategic Approach to Software Selection,” we discuss the critical elements for selecting the software package itself, including:
- Criticality of decision makers
- Business requirements definition and prioritization
- Fact-based evaluation
- Vendor and team preparation
Along with these considerations, we recommend developing a short list of vendors who are perceived as leaders in the solution space, who are in line with the company’s business direction and whose solution set shows strong evidence of best supporting strategic drivers. Here is another instance where having an objective, outside opinion on the industry solution leaders is invaluable in streamlining the evaluation process, as well as injecting “insider” information that is not available from trade shows and vendor marketing propaganda.
From there, companies should ask for a request for information (RFI) or a more detailed request for proposal (RFP) from each vendor. These should be strongly based on business requirements, architecture components and costs. This will ensure an understanding of how well each vendor is in line with the company’s business and technology direction. Digging deeper into the assessment of solutions that appear to meet requirements in the RFI or RFP, a company should be prepared to conduct detailed, scripted demonstrations, comprehensively understand each vendor’s architecture, closely examine the total cost of ownership and benefits, as well as conduct reference calls with clients who are not only using the solutions proposed, but also are ideally in the same industry. Key leaders from both IT and the business must be active participants in the solution selection process.
Indeed, selecting a new solution to replace one that has been “tried and true” is no small task. However, when considering strategic – and often disruptive – technology investments, with the opportunity to significantly improve a company’s business processes, efficiencies and competitive capabilities, it is wise to invest the time and resources to ensure the very best solution is identified.