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Advanced
How To Guide
Choosing eBusiness vendors and software
2.01 Due Diligence
The following is a list of the main issues that should
be covered.
1. Talk to Current Clients.
How has the service been? How does the company respond
to questions, problems and complaints? Any reluctance
to provide an opportunity to speak to existing customers
should be viewed negatively. Former clients can be a
great source of information. Conversations with former
employees can also be illuminating. It is important
to note that no company will receive a glowing recommendation
from everybody. You are merely trying to get a balanced
perspective.
2. Identify the Key People.
Use your customer conversations to find out which people
are particularly good/bad in the vendors organisation.
Aim to have the pick of the litter committed to your
project. You should identify these people by name and
insist that you meet them prior to any negotiations.
You need to be sure that these people will be available
to you and that they will not be over-stretched with
other projects. Personalities are important; be confident
that you can work together effectively. . Clarify contingency
cover arrangements in the event of staff absence through
illness, for example.
3. Access Customer Base.
Has the company done work in your industry or target
geography? Have they worked with start-ups before? Have
they worked with any blue-chip clients? Are they working
with any of your competitors? If so, how will they prevent
cross-contamination? Are they working with any complementary
companies? If so, can they facilitate cross-pollination?
4. Examine Relative size.
Is your business going to be important to the vendor?
Is it big enough for them to make money on? Is it too
big for them to handle? Is it in an area in which they
are strategically interested? Will it command the attention
of the best people in their organisation?
5. Check Financial/Operational Stability.
Look for publicly available financial accounts. Ask
about the financial situation - profitability, cash
flow, and liquidity. Look particularly for requirements
for future funds. Also check whether the company has
any legal claims pending or has gone through recent
layoffs.
6. Examine Strategic Goals of the Vendor.
Are these consistent with what the vendor is doing for
you? Some vendors have hidden agendas that can take
on a life of their own as a project moves ahead. It
is important to understand what you really want to do
and not get sucked into what they want to do.
7. Check the Vendor's Vendors.
You should also check behind the vendor. Many eBusiness
vendors in Ireland are agents, partners or resellers
for larger international organisations. Check the financial
and operational stability of these companies by looking
at the Investor Relations sections of their websites
if they are public companies, or by demanding the information
from the local vendor with whom you are dealing if they
are private.
2.02 The eBusiness Vendors' Perspective
It is important to appreciate some of the difficulties
vendors have doing business with SME's. It is often
not possible for vendors to give a fixed price on contracts
when dealing with SME's. This is because the cost of
implementing the project can depend hugely on the degree
of problems within the customer's back office system,
the level of inaccurate data, the degree to which the
customers staff respond to requests for information,
and the level of assistance the vendor can realistically
expect to receive during the implementation process.
In addition, SME's often lack the experience or expertise
to properly specify the solution they require - such
contingencies are impossible to budget for upfront.
Also working for SME's often involves project delays
and postponements as other business items need to be
dealt with in time previously scheduled for advancing
the IT project.
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