How to Evaluate Vendors

When evaluating MI or EMI vendors, consider focusing the evaluation in three core areas that apply to most manufacturers choosing enterprise software:¹⁶

1. Viability: Will the vendor be in business in 10 years?
2. Quality of vendor services: Will the vendor help with implementation, to configure the system and train staff to ensure they can do their jobs in the system? How is vendor support? Are knowledgeable, helpful, and friendly vendor employees available when and how staff need to reach them? Does the vendor provide careful maintenance of the system, with continuous, well-thought-out enhancements, with needed documentation and training?
3. Commitment to the specific market: Will the vendor make ongoing investments in meeting the software and service needs of organizations in the same niche over the next 10 years?

Before beginning the search in earnest, the following decisions need to be reached:

• What type of database platform will the MI or EMI software be on? Save time by looking only at software that runs on the desired platform.
• How many users will be on the system? Licensing fees can be based on named users (the number of unique users who will use the system) or concurrent users (the maximum number of users on the system at one time). At this stage, only estimate the number of named and concurrent users.
• Define the type of business being conducted. Is it make-to-order? Make-to-stock? Mixed mode? Process? The package must fit the business model.
• What is the budget? Plenty of solutions are available at many different price points.
• Devise a ballpark budget that includes software and implementation services to avoid wasting time investigating software that is unaffordable.

Once the basics have been addressed, it is time to carry out an exhaustive requirements analysis. The key steps in purchasing an MI system are:¹⁷

1. Conduct a comprehensive assessment of your existing business processes and the scale of operations to identify the need for an MI or EMI system. Implementing an MI system is a long-term strategic decision for any organization, as it alters the way your organization works.
2. Define the objective of your selection process. Considerable background research is necessary before exploring the market for MI packages. Some level of configuration and customization to the MI package as well as to an organization’s business processes and existing enterprise software (e.g., ERP) is always required during implementation. The objective of the selection process should be to find a package that is flexible enough to meet the organization’s needs or that can be customized easily to obtain a “good fit.”
3. Form a selection or evaluation committee for carrying out the evaluation process. The evaluation committee should typically include functional experts from different departments, top management (CIO, COO, or IT director), consultants, and end-users. As members represent their respective business functions, the final package will find enterprise-wide acceptance and application.
4. Define your product requirements, in terms of both core and advanced EMI modules and features.
5. Develop pre-evaluation selection criteria to permit the evaluation of the available packages on the same parameters; this will help in shortlisting the top five or 10 packages for final selection. The selection criteria should be prepared to help the committee choose a solution that meets critical business needs, matches the business profile, and identifies with the company’s practices.
6. Shortlist three to four MI packages. Besides using pre-evaluation selection criteria, MI packages can also be shortlisted with the help of external consultants by analyzing product specifications and identifying solutions that are being used by peer companies or by companies using your ERP solution. Once a few packages are shortlisted, the respective vendors can be contacted for presentations and demonstrations.
7. Conduct extensive research on the shortlisted packages. The selection committee should gather more information about shortlisted packages through independent industry experts, user reviews, and research agencies. These channels provide analyses and comparative reports on leading packages, and position themselves as excellent sources of information on the latest developments in the Manufacturing Intelligence arena. However, these reports are not completely unbiased and objective in nature, and therefore should not be relied upon as gospel. Refer to a wide range of research resources and get an overall idea about the features of shortlisted MI or EMI packages.
8. Formulate the final selection criteria. Even before marketing executives of ERP vendors make presentations, be ready with a comprehensive list of questions that address all your concerns. These questions are the final selection criteria for shortlisted ERP packages.
9. Carry out a detailed requirements analysis of business needs to prepare the selection criteria. Further categorize the criteria as “critical,” “essential,” “desirable,” and so forth; assign appropriate weights to make the evaluation process more objective. The categorization of requirements will depend on the criticality of requirements for your particular company. For instance, a company with operations units in different countries might have multi-currency and multi-language support as critical criteria. On the other hand, a local company might have multi-currency and multi-language support as desirable or avoidable requirements.
10. Evaluate vendors based on selection criteria and product demonstrations. The vendors’ responses to your questions will help to eliminate a vendor or strengthen its case. You can also prepare minutes of the meetings and make the vendors sign them. This will prevent them from making false claims and will hold a vendor accountable in case of failure to deliver promised results. Once the committee has evaluated MI packages based on the pre-evaluation and selection criteria, seen vendor presentations, and clarified all questions and doubts, it should be able to make a selection.
11. Check for successful implementations by the vendor. Before making the final call, visit and consult companies where the selected MI or EMI package has already been implemented. If the package is working as expected in those companies, it will reinforce confidence in your selection. However, if you identify any issue, you should reconsider your purchase decision.

Throughout the selection process, conclude each step with the consensus of all members of the selection committee, including end-users, to gather enterprise-wide acceptance for the MI package.