So you have decided that you need a bespoke system written
specifically for you and you have found a few suppliers that all
claim they can do the job. How do you choose?
There is no cast-iron way to guarantee that you make the right
choice - even big organisations with millions to spend and with
teams of professionals analysing the pros and cons of different
suppliers' proposals have made some spectacular mistakes. However,
what I've tried to do below is offer some thought provoking
questions which you could use to help 'get a feel' for whether or
not a supplier is right for you.
- Track record and testimonials
- Does the supplier have a track record?
- What similar projects has the supplier completed?
- Are there any testimonials from clients?
- Can you contact any of the clients for recommendation?
- Truth and trust
- Is the supplier honest enough to admit that some parts of your project are new to them?
- No supplier has done everything before or knows immediately how to solve every business
requirement - this is a sure sign of "hot air".
- Technology is not a panacea!
- What technologies does the supplier propose to use?
- Is it an obsolete technology or, conversely, is it so new it's still being developed?
- Is it a technology in common use - it is
often hard to find replacement suppliers who can work with obscure technologies.
- Notwithstanding these questions,
remember it's not the technology that will solve your business
problem - that is only the vehicle. The true solution lies in
the skill and expertise applied to the understanding and
analysis of the problem requirements and the resulting design
of a system to meet them.
- Flexibility of the supplier's proposed solution
- How much of the operation of the new system will YOU be able to
alter, or will you have to go back to the supplier for almost
- In other words, once the new system is up and
running, how self-sufficient will you be, or conversely, how
dependent will you be on the supplier to make adjustments?
- How easy will it be to implement software upgrades throughout
your organisation or will it give you an IT headache?
- If you decide you need a new report from the system is
it going to be a 5 day turn-around job or can it be
written and installed in a few hours. The costs for such
an enhancement are likely to be closely related to the
time it takes.
- Warranty and support
- Once the new system is installed and you are using it, what happens if a programming error is uncovered?
- Will you have to pay for it to be corrected?
- And after the warranty period, what arrangements are available for on-going support - technical and user?
- Is the supplier prepared to offer a committed support agreement for a fixed price?
- Does the supplier already provide other customers with support agreements or are you going to be a one-off?
- Pricing approaches
This is a complex area with pros and cons but here are a few guidelines:
- If your project is very well defined and you know clearly
what you want, you can expect a proposal on a fixed price
basis. In other words, you know exactly what you will pay for
the finished job. The supplier may want to split the project
into 2 distinct phases and quote for the second once the first
has been done. The first phase will be to understand and
define the requirements of the new system. The second will be
to develop and install it.
- If the requirements or the details are not very well
understood then you may get a fixed price proposal but it will
almost certainly be of the 2 phase variety. Alternately you may
get a 'time & materials' proposal whereby you will be charged
for the amount of work actually carried out at a stated hourly
- A fixed price proposal may seem good from your point of
view, in that you know how much it will cost you. However there
are pit-falls. Firstly, the supplier will build in some
contingency to the price to cater for unexpected difficulties with
the development. So, if the project is estimated to take, say, 100
hours at £50 (£5,000) the supplier may quote you 10%, 25% or
even 50% more to cover his risk that the project may overrun.
Secondly, a fixed price is based on a fixed specification. If,
partway through the development, something needs to change this is
likely to incur a re-costing with a consequent uplift in the final
price. Watch out here - some suppliers come in with a low initial
proposal to win the business and then heavily load subsequent
changes. Your final cost could be dramatically higher than the
- A time & materials proposal may sound like a blank
cheque for the supplier but in reality it provides the best option
in terms of flexibility and value for money. Firstly, there is no
contingency built in. You pay for the work actually done so if the
project is completed in half the time expected, then you pay half
the amount. However, the converse is also true. Secondly, it is
very flexible since changes to the specification do not incur a
total re-costing exercise, although they may need additional work,
you will only pay for that extra work. Although a time &
materials proposal sounds open-ended, it should include a 'best
estimate' of the amount of work required. This can be used to
manage the project progress and, if it looks like exceeding the
estimate, discussions can be started to look at the options and
decide on the way forward.
- Project estimation is not an exact science consequently
suppliers, when creating a proposal, need to take into account the
risk that their estimate is going to be wrong. The different
methods of pricing a proposal place the risk in different places:
Fixed price - risk is supplier's; Time & Materials - risk is
yours. If you want the supplier to carry the risk, you will have
to accept that the supplier will charge you for it.
Make sure you get the proposal that you prefer by asking. The
first proposal offered by a supplier will simply be the one that
the supplier feels most comfortable with or that is most
appropriate for the nature of the project. However suppliers
will normally provide an alternative if requested.
- Motivation and commitment
What if there's no clear 'winner'? Assuming that all the above objective parts
of your suppliers' proposals check out, you will be left with
a more subjective basis for decision making - in other words 'gut
feel'. This is not entirely a bad thing but can be misleading.
To help put a little more structure around this area, consider the
Does the supplier care about what is right for your
This may seem a strange question but underlying it is
the supplier's basic motivation, and this can have a major impact
on the software solution that you end up with.
suppliers exist to make money but for some there is also the drive
to want to do a good job - and that doesn't simply mean writing
software that works.
An 'ordinary' software supplier will hear
what you ask for and write software to carry it out.
supplier with business/systems analysis skills will, from
experience, be able to 'see' ways that a new system could work to
improve a particular business process and will discuss this with
you as an alternative approach. Then write the software according
to the conclusion of the discussion. Sometimes, the 'good'
approach will mean less software to be written but the improvement
for the business will be much greater. This is caring about what
is right for the business.
I hope that you find these ideas helpful in guiding you
through the process of selecting a supplier, and of course, I
hope that you choose SUMMIT.