System Selection approach for Enterprises, Part 2: Parameters for System Evaluation

In the previous blog post, a ‘4 Quadrant model’ for system selection approach was explained. In this post, I will discuss parameters for System Evaluation, while selecting a new system, typically a packaged application or a platform for for implementation.

I recommend following parameters for system evaluation:

  1. Functional Requirements
  2. Technology Requirements
  3. Support
  4. Vendor Credentials
  5. Customer Reference
  6. Cost

Typically, first 5 parameters are clubbed together as Technical Evaluation and Cost as Commercial Evaluation. Organisations follow different approaches while carrying our Technical and

Functional Requirements:

Functional requirements are the system functionality requirements, which users of the system or performers of the process being automated by the system expect system to offer. For example, in case of an HRM System (HRMS), system users or HRMS team members may expect the system to fulfill the functionality such as

  • Employee Database Maintenance
  • Recruitment process workflow
  • Employee on-boarding workflow
  • Leave Management
  • Performance Appraisal Management
  • Employee Exit Management, etc

It is always advisable that these requirements are detailed out. The more detailed are the requirements, lesser are the grey areas and better is the evaluation.

Technology Requirements:

Technology requirements are provided by IT team. They cover the following areas:

  • Software Development platform
  • Software Architecture
  • Coding Standards
  • Devops, Code Management & Release Management
  • OS, App Server, Database Server
  • Integration
  • Hardware
  • Information Security
  • Data Privacy
  • System Administration
  • Deployment: On Premise / Cloud

Support:

Support during implementation and post production movement are extremely critical for smooth implementation and uninterrupted functioning of the system post implementation. Support related requirements cover the following:

  • Implementation Team Structure & Size
  • Implementation Methodology
  • Implementation Ownership
  • Post Implementation Support & SLAs
  • Local Support

Vendor Credentials:

Vendor credentials, irrespective of whether deployment & use of the system is “On Premise” or “On Cloud / Saas”, are very critical if the system to be implemented is mission critical. Organisations tend to consider commitment to mission critical systems an investment irrespective of the commercial model. Where such systems are expected to hold stakeholders data (customers, suppliers, etc) for long duration i.e. for over 3, 4 or even more decades, exit & migration from such systems can be extremely painful. Vendor credentials related requirements cover the following areas:

  • Vendor Longevity
  • Vendor Financials
  • Vendor Team Size
  • Vendor Product Development & Services Team
  • Customers & Partners

Customer References:

Reference & feedback from existing Customers of the product / system can give unique insights about the vendor, product, implementations / deployment, implementation approach & operations of the system. These insights not only help in process of evaluation but also during adoption & implementation of the system under consideration. Customer reference tends to be a very broad parameter covering Product Features, Implementation, Support, Post Implementation Maintenance etc. The scoring on this parameter tends to be very subjective.

Cost

Cost should consider Total Cost of Ownership for a 5-7 year period, which tends to be typically amortisation period for any softwares. In case of Capex On Premise Deployment, cost would include:

  • One Time / Initial Capex
    • License Fees
    • Services Fees: Implementation & Customisation
    • Hardware Cost
    • OS / App Server / Db Server Cost
  • Recurring Annual Opex
    • AMC
    • Production Support

In case of Opex / Cloud based Saas deployment:

  • One time Set-up / Implementation Cost
  • Monthly recurring Fees

We will discuss how these evaluation parameters could be used to build an evaluation model in our next blog post.


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