Information Technology Project Management Buying Packaged Software:  RFPs and Vendor Selection
Why create software when you can buy it?  <ul><li>Many times, the best solution is to buy packaged software </li></ul><ul>...
What Should an RFP Contain? <ul><li>Key dates in the proposal process </li></ul><ul><ul><li>RFP release, proposal due date...
Criteria for Evaluating Vendor Software Packages <ul><li>Financial viability of vendor </li></ul><ul><li>Other vendor char...
Financial Viability of the Vendor <ul><li>Does the vendor have sufficient capital/surplus to meet its on-going obligations...
Other Vendor Characteristics <ul><li>Does vendor provide timely on-site and/or telephone support? </li></ul><ul><li>Does v...
Contract Terms and Conditions <ul><li>If source code is not a deliverable, will it be maintained at a third party location...
Contract Terms and Conditions cont’d <ul><li>Is the timetable for all deliverables and payments clearly defined? </li></ul...
Opinions of Other Users of the Package <ul><li>How satisfied are they? Would they purchase it again? </li></ul><ul><li>How...
Package Characteristics <ul><li>Does it provide the needed functionality? </li></ul><ul><li>Is it easy to use? </li></ul><...
Pros and Cons of Packaged Software <ul><li>Pros </li></ul><ul><li>Cons </li></ul>
Remember:  Customizing Packaged Software Drives Up Total Costs 0 2 4 6 8 10 0.5 1 2 3 4 5 % LINES OF CODE CONVERTED TOTAL ...
Project Management Challenges Remain <ul><li>Just because you buy software or enter into an outsourcing arrangement doesn’...
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rfp2.ppt

  1. 1. Information Technology Project Management Buying Packaged Software: RFPs and Vendor Selection
  2. 2. Why create software when you can buy it? <ul><li>Many times, the best solution is to buy packaged software </li></ul><ul><li>Often begins with the development of a Request for Proposal (RFP) </li></ul><ul><li>Detailed list of questions submitted to vendors </li></ul>RFP
  3. 3. What Should an RFP Contain? <ul><li>Key dates in the proposal process </li></ul><ul><ul><li>RFP release, proposal due date, proposal evaluation, and so forth </li></ul></ul><ul><li>Contact information </li></ul><ul><ul><li>Who the vendor may contact and how communication should be done </li></ul></ul><ul><li>Information about your business and your requirements </li></ul>
  4. 4. Criteria for Evaluating Vendor Software Packages <ul><li>Financial viability of vendor </li></ul><ul><li>Other vendor characteristics </li></ul><ul><li>Contract terms and conditions </li></ul><ul><li>Opinions of other users of the package </li></ul><ul><li>Package characteristics </li></ul>
  5. 5. Financial Viability of the Vendor <ul><li>Does the vendor have sufficient capital/surplus to meet its on-going obligations and to absorb any unexpected financial losses? </li></ul><ul><li>Does the vendor have any contingent liabilities (e.g., lawsuits) that could adversely affect its financial condition? </li></ul><ul><li>Has the vendor achieved profitability from its operations? </li></ul><ul><li>Is there a concentration of revenue in one or relatively few customers? </li></ul>
  6. 6. Other Vendor Characteristics <ul><li>Does vendor provide timely on-site and/or telephone support? </li></ul><ul><li>Does vendor track user questions/problems? </li></ul><ul><li>Does vendor adequately test new products and releases? </li></ul><ul><li>Does vendor have sufficient knowledgeable staff? </li></ul><ul><li>Does vendor provide quality training and documentation? </li></ul>
  7. 7. Contract Terms and Conditions <ul><li>If source code is not a deliverable, will it be maintained at a third party location (e.g., bank vault), and be made available in the event the vendor goes out of business? </li></ul><ul><li>Is the timeframe within which the vendor is required to respond to problems/questions clearly defined? </li></ul><ul><li>Is the extent of vendor support, training, and documentation clearly defined? </li></ul>
  8. 8. Contract Terms and Conditions cont’d <ul><li>Is the timetable for all deliverables and payments clearly defined? </li></ul><ul><li>Has a favorable relationship between deliverables and payables been negotiated? </li></ul><ul><li>Are all costs clearly defined? </li></ul><ul><li>Are there penalties if contractual agreements are not met by the vendor? </li></ul><ul><li>Does the contract allow for in-house use of the package for acceptance testing purposes prior to purchase? </li></ul>
  9. 9. Opinions of Other Users of the Package <ul><li>How satisfied are they? Would they purchase it again? </li></ul><ul><li>How responsive is the vendor to problems? </li></ul><ul><li>Is the system easy to use? </li></ul><ul><li>What kind of conversion/implementation problems were encountered? </li></ul><ul><li>How difficult is it to interface the package with existing systems? </li></ul><ul><li>What other products were considered and why did they select this one? </li></ul>
  10. 10. Package Characteristics <ul><li>Does it provide the needed functionality? </li></ul><ul><li>Is it easy to use? </li></ul><ul><li>Is its design flexible enough to allow changes? </li></ul><ul><li>Does it have good documentation and help screens? </li></ul><ul><li>Does it use current but proven technology for which support is available? </li></ul><ul><li>Does it include appropriate control features? </li></ul>
  11. 11. Pros and Cons of Packaged Software <ul><li>Pros </li></ul><ul><li>Cons </li></ul>
  12. 12. Remember: Customizing Packaged Software Drives Up Total Costs 0 2 4 6 8 10 0.5 1 2 3 4 5 % LINES OF CODE CONVERTED TOTAL IMPLEMENTATION COSTS
  13. 13. Project Management Challenges Remain <ul><li>Just because you buy software or enter into an outsourcing arrangement doesn’t mean that you can count on the vendor to manage the project </li></ul><ul><li>Requirements still have to be determined and system still have to be implemented along with accompanying organizational changes . . . And these are the two key areas where project often go awry </li></ul><ul><li>The same project management principles apply </li></ul>

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