And then… Look for People to Date
Next, using proprietary WMS selection tools, the company’s specific software requirements were inventoried and compared with the features and functions of 10+ different commercial WMS software products. Two candidates closely matching the company’s needs were identified by The Progress Group, but the company also suggested a third: a warehousing module from a premier catalog management system (CMS).
The payback of these three alternatives was computed using the 40+ best practices identified earlier. As a result, the CMS warehousing module was rejected: it just couldn’t generate a payback comparable to that of the other two without substantial modifications. The “short list” candidates were then invited in for demonstrations.
The First Date…
The Progress Group believes in customer-driven rather than vendor-driven demonstrations. We think this provides better insight into how the software will actually work within the company’s operation. At this company, before any of the vendors came on site to demo their software, The Progress Group worked with the company to assemble photographs and a PowerPoint presentation that described each step of the company’s current operation. (We call this part of our selection methodology the “Virtual Tour.”)
The Virtual Tour was composed of over 100 slides and photos. For each step in the process we listed a series of “demonstration points.” The Tour was sent to the vendors ahead of time, and each was told to prepare materials that would showcase their products performing these different activities. At scoring time, a scoring matrix was given to demonstration participants for use in evaluating each vendor’s software on each demonstration point.
Each vendor came to the company’s East Coast DC and spent two days showcasing its product. Two LCD projectors were used simultaneously for this demonstration. On one screen, the Virtual Tour would be displayed and on the other, the vendor’s software would be running. The Progress Group or Norm Thompson's staff would begin the demonstration by explaining a particular step in the Virtual Tour and then the vendor would get up and demonstrate how their software could be used to meet the requirements of that step. This dance continued for about two days.
The HQ Visit … Going Over to Their Place
After the virtual tour, the company and The Progress Group visited reference sites of similar customers for each vendor. Once those visits were done, The Progress Group and the company’s staff visited the headquarters of each vendor. At the HQ, The Progress Group interviewed candidate project managers and project staff. (An often-overlooked ingredient in successful software projects is getting good people to install your software.) The Progress Group made sure that each vendor intended to provide staff for this company’s project who knew the product, had a results-oriented mentality and were a good fit culturally with the company’s staff.
Another key activity during the HQ’s visit was to review the modifications that had been identified during the Virtual Tour. The Progress Group’s staff met with the software designers at each vendor to develop “ballpark” estimates for the various enhancements associated with each software package. This allowed us to define much more accurate budgets for the project as well as to develop an “apples-to-apples” comparison of vendor costs.
Another common mistake on WMS selection projects is to focus a lot of effort on inventorying the software functionality needed as opposed to the services you will need to install the software. This occurs despite the fact that on just about every WMS software project the implementation services are more expensive than the software. On this project, The Progress Group spent a significant amount of time documenting in an RFP sent to the vendors ahead of time what specific services would be needed by the company during the software’s installation.
The last task accomplished during the HQ visit was an examination of the installation methodology used by each vendor. The vendor’s methodology was compared to the methodology outlined in the RFP, and steps were added to both vendors’ approaches to account for steps that they assumed the company would do or pay extra for. This ensured that we had an apples-to-apples comparison on this important selection criteria.
Picking a Partner
Once the headquarter visits were over, the vendors were permitted to submit revised bids. Once these bids were received, a mad scramble began to draw up an apples-to-apples cost comparison and a discussion of various intangibles/other factors that influenced the decision. All of this information was aggregated into a Final Selection presentation taken to the Board for approval. At The Progress Group’s suggestion, neither vendor was told of their status to preserve the opportunity to negotiate further with the winner.
Negotiating a Deal
One of the greatest places The Progress Group can add value is during the negotiation phase of a selection project. Unlike competitors who leave this to the company, we are usually active in this process. Having us involved at this stage usually pays for our entire involvement. We understand what things cost as well as areas in which misunderstandings can develop later that can cost you unexpected money. We also know what is reasonable to ask for in terms of price guarantees.
On this project, we helped the company negotiate a very good deal. We also helped identify ways in which the company could help the vendor out in areas of marketing this product that made the deal mutually beneficial. Not surprisingly, however, this part of the project took a lot longer than expected. (This is not uncommon.) It took about three months to get a signed contract in hand from the moment the company’s team had decided the winning vendor.
Project Results
The benefits of this project are:
The company found a vendor that matched its needs closely, which reduced the risk of the implementation substantially.
The package was justified through a rigorous joint effort. The Progress Group provided best practice ideas and the company estimated what those ideas would be worth in their operation with some guidance from us.
The company chose a vendor they would not have been likely to consider were it not for The Progress Group’s knowledge of the marketplace.
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