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Advanced
How To Guide
Choosing eBusiness vendors and software
Single or Multiple Vendors?
It is at this stage that you have to determine whether
your project is best performed by a single vendor (a
turnkey solution) or a number of specialist vendors
working in collaboration (a best-of-breed solution).
A number of factors need to be considered. If the project
is small and non-strategic (it may allow you perform
a new function but it does not fundamentally change
the way you do business) it usually makes sense to go
for a single established vendor whose generic offering
is likely meet your needs. This approach should be faster
and cheaper than trying to manage multiple vendors.
And since the project is not mission-critical you and
your staff need not be overly distracted during implementation.
An example of this kind of project would be providing
an email system for your organisation.
If however you are undertaking a major strategic change
through technology, it may be worthwhile considering
the possible benefits of employing specialist vendors
for each piece of the project. A generic solution may
not be flexible or innovative enough to bet-your-business
on. In this case you are committing to significantly
greater expense (price and use of internal resources)
and implementation time. It is important to have on
staff someone who is sophisticated in IT to help select
the vendors who can, in combination, deliver the best
result. Having this IT person is also vital for resolving
the inter-vendors disputes that frequently arise in
collaborative projects. If your organisation does not
have such an IT expert it may signal that the best-of-breed
approach may not be the correct approach for you, or
alternatively that you need to bring in outside expertise
for the duration of the project in the form of a project
manager.
Risk of Dependency
It is also important to appreciate what level of dependency
your organisation will come to have on the software
and resulting solution provided by the eBusiness vendor.
If the solution is based on software that is readily
available from other sources and the solution is reasonably
straightforward you are unlikely to develop a serious
dependency. It is still important that someone in your
organisation is familiar with the software and is able
to update information and perform routine maintenance.
In the above example, if your solution provider goes
bust you should be able to find a suitable replacement
reasonably easily. If however your solution is highly
customised and/or based on proprietary software (software
invented by the provider and known only to them) you
need to take greater care. Firstly, before entering
into an agreement you should try to determine the likelihood
of the vendor going bust or changing its business materially
(see following section on due diligence). You need to
be confident that the vendor is committed to the software
your solution is based on and that the company is financially
secure. You may be betting your business on this vendor's
success/survival. As such you might be best served avoiding
smaller start-up type organisations in favour of larger,
well established ones. Even after selecting a stable
vendor you should insist that the workings of your solution
are well documented so that some other organisation
can take over if the need arises. In this second scenario
it is important that people in your organisation are
familiar with the application and can perform minor
trouble shooting in addition to regular updates and
routine maintenance.
Shortlisting
On deciding upon your desired vendors, you should rank
and advise the top several (maybe 3-4) that they have
been shortlisted. As a courtesy rejected vendors should
be contacted immediately. It is important to keep multiple
vendors under consideration at this stage; both for
the negotiating leverage this affords, and to protect
from the possibility that one or more may remove themselves
from consideration.
It may be worthwhile employing an independent consultant
to help identify which vendor(s) are best suited to
your project, and to assist in setting up the arrangement.
Qualified individuals may be found within successful
related technology or management consulting companies
that are not connected to the vendors. A once-off arrangement
or retainer payment may be appropriate depending on
the scale of your project and your likely ongoing appetite
for advancement through technology.
At this stage it is important to perform rigorous due
diligence. Due diligence is the process investors use
to check out the business and financial prospects of
a potential investment. You should employ the same process
to identifying the best eBusiness vendor for your company.
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