The third step on the path is Narrowing the
Field. There are literally hundreds of MRP software packages on the
market and we need to narrow the field to four or five packages. The
path to narrow the field is to ask each of the vendors that we are
considering how close the package comes to meeting company needs.
One way to gather this information is to prepare a Request for
Proposal (RFP) and ask the vendor to respond to the questions. The
basis of the RFP is our bulleted requirements. We ask each vendor to
tell us if their package can meet the bulleted requirements as
4: without any modification
3: with 8 hours of modification
2: with 40 hours of modification
1: with 160 hours of modification
0: more than 160 hours of modification
Also included in the RFP are general
requirements, vendor qualifications including vendor financial
The returned RFPs can easily be analyzed using a
spreadsheet program and the four highest scoring vendors can proceed
to the next step. This process produces support documentation needed
for management to identify on what basis the four finalists were
The second step on the path is Setting the Goal.
When selecting an MRP package, we should not seek merely to automate
the current processes or even worse try to automate the current
manual systems by reproducing the same manual forms on a screen.
Instead, take the opportunity to reevaluate current procedures. The
introduction of a new MRP system is a perfect opportunity to
redesign or reengineer obsolete processes for improved efficiency.
In many cases the reengineering yields can be achieved by just
implementing a new MRP system.
Once we know the way we want the future processes
to be we can then develop the requirements. This will be the target
Determining the Winner
The fourth step on the path is to Determine the Winner. In the
RFP, we asked the vendor to tell us how well our requirements were
met, but to determine the winner we must now determine how well the
finalists met our requirements. The way for us to see how well the
package meets our requirements is to ask the vendor to show us by
demonstrating the package. Most demonstrations are nothing more than
a glorified sales presentation. The way to change the demonstration
from a sales promotion to an important tool in the selection process
is to take control of the demonstration by telling the vendor
exactly what should be demonstrated and how it will be judged. This
is done by developing a "script" that each vendor must
follow. The script should follow the normal flow of the business
events. Every item that was required on the RFP checklist should be
included in the script.
The data to be used in the demonstration should
be real company data. This insures that the personnel attending the
demonstration will feel comfortable with it.
Awarding the Medal
The fifth step on the path is Awarding the Medal.
In this step we verify that the package will work in our
environment. This is done by stress testing the package in the
client's production environment. Also while the package is in
house, we should take the opportunity to use the system to insure
that we did not miss anything during the demonstration.
To insure that the vendor is everything it
represents itself to be,
we perform checks on the vendor including contacting random
customers and users' groups. Also, during the background check
we verify the financial stability of the vendor and checfe^Jor any
The final item before we sign on the dotted line
is to negotiate the contract. Most companies negotiate on price but
often the conditions in the contract can be more costly than any
reduction from list price that can be negotiated. Many companies do
not try to change the fine print. As part of negotiations, every
paragraph should be reviewed and considered negotiable as part of
the final negotiations. Items to look for are nontransferability and
non-portability of the computer that the software is run on.
When negotiating price, be sure to include the following:
• maintenance cost for the first five years
• upgrade costs
• downsizing rebates
Now that we have completed all of the steps on
the path, we are ready to sign on the dotted line, confident that we
have limited the surprises.
If we have completed the path and have found that
a package does not meet our requirements or for certain modules the
package ib inadequate, we have not wasted the time we spent. The
system requirements are the specifications that will be required for
a custom system. The scripted demonstration can be turned into the
best script for the customer solution.
The path that has been described in this paper will insure that a
company has very few surprises when the software is implemented.
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