Sales channels struggle to understand their products well enough to sell them effectively. Getting sales representatives and channel partners up to speed (informed) on new and existing products is expensive and time-consuming. Furthermore, as product complexity increases, so does demand for customized products and services. For more background, please see The Basics of Quote-to-order Systems.
Even More Complexity beyond the Direct Sales Force
Although the traditional call center is not often used to sell and handle customer inquiries (or complaints) about very complex products, there will still be times when information needs to be given or received by phone. Some manufacturers of configured consumer products, such as personal computers (PCs), or Internet service providers may use telephone sales and support quite extensively, in addition to the web chat and self-service options of late. Internal sales and support staff share many of the same frustrations as their colleagues in the field, and need similar solutions. However, there are some specific issues that need to be addressed if complex or customized products are to be dealt with in a satisfactory manner via the telephone.
While communication may be bidirectional, one must realize the limitations of a solely verbal interaction with the customer, where the agent generally has the benefit of detailed systems information. Therefore, a support system for telephone or Web users must be simple to use and clear in its presentation, even for complex products. This will allow orders to be taken correctly every time, and up-selling and cross-selling opportunities to be promoted while the support system is closely integrated with order fulfillment and other downstream systems.
To help customers leverage the highly profitable, but often untapped, post-sale aftermarket and drive-increased revenue, Webcom Inc. (www.webcominc.com), an up-and-coming provider of quote-to-order (Q2O) solutions, has recently launched the WebSource CPQ Assets capability. Webcom's goal is to enable organizations to improve customer satisfaction and increase productivity of the sales force, channel partners, and back-office personnel by addressing the needs of aftermarket, field service, entitlements, and assets. The new module allows users to easily quote, propose, and sell additional products and services that are pertinent to a specific asset previously created (configured) via the WebSource CPQ (configure, price, and quote) product suite.
The need for this after-sales product came from customers frequently quoting renewals, upgrades, aftermarket service, add-ons, and so on. In industries that sell capital equipment, such as medical devices, telecommunications, instrumentation, IT hardware, and other complex equipment, companies are starting to significantly increase their focus on services revenue. For some companies, this is a strategic move to increase the top line, while other companies are looking to replace revenue from slower, new product sales in the current economic conditions.
Thus, by selecting an asset, the user will now automatically be able to see the product and commercial characteristics associated with the asset, and based upon those attributes, will be guided to offer, select, or restrict relevant services and product offerings.
The WebSource CPQ Assets module includes a number of key features:
* Asset properties convey product, installation, and commercial characteristics, including customer information.
* Asset attributes affect the behavior of a product via product rules, dependencies, and triggers, thus guiding the user.
* Workflow and permission mechanisms govern who can make changes and the timing of such changes.
* Assets can be searched and sorted via a number of fields, including “key” attributes.
* Assets can be updated manually or through the quotation process via revision control.
* A side-by-side asset comparison is available.
* Automation of repetitive processes, including annual, quarterly, and monthly services (such as warranties, service contracts), and maintenance are available.
* Automated processes linked to output document templates, such as quotes or invoices to assets, are included.
* User-defined groupings for quotation and invoicing purposes are provided.
* User-defined selection parameters for automated processing, such as all assets with warranties expiring in 60 days, are provided.
* An optional linkage to customer relationship management (CRM) systems for opportunity creation is included.
* Users can forecast revenue from automated processes.
* Batch import of existing assets eases module implementation and creates greater value.
Last but not least, while the indirect channel or the network of dealers, agents, resellers, distributors, and remote sales offices enables more effective, low-cost, and rapid expansion into new and unfamiliar markets, the above issues faced by the direct sales force are magnified for this external force. Separated from the parent organization by distance and by time zones, indirect sales channels present terrible communication and management challenges for any organization. These challenges are much more demanding when remote partners handle products that require considerable sales knowledge.
Some concerns that are very specific to this arena include the following:
* Sales cycles are lengthier because of the need to consult the master vendor over many details.
* Security and geographic concerns can make it very difficult to distribute information and keep the information current.
* Because of product complexity, agents may choose (or may only be allowed) to sell a limited range of products. For instance, companies may simplify dealer products to make them easier to sell, which, on the downside, almost always hampers competitiveness and profitability.
* Reseller quotes may be even more error prone and lack the most current information.
* Indirect training is difficult and costly, while generating forecasts for indirect business is much more difficult.
One should also not forget about the challenges that organizations selling complex products face when having to assimilate product lines and sales teams from mergers and acquisitions (M&As). For all the above reasons, the notion of a “perfect order” (an order with absolutely no errors, from order entry, to shipping, to collection—please see The Perfect Order—Inside-out or Outside-in?) might remain an unattainable goal when selling complex products.
In many traditional complex manufacturing environments, a number of factors and situations can drain order profit margins: the costs per build-to-order fulfillment are often unknown or difficult to pinpoint; the engineering department needs to keep a dedicated headcount for checking proposals and completing schematics; the “swivel-chair” integration (multiple departments entering the same data) makes errors more likely between disparate enterprise systems; proposals for complex products take weeks, making 20 percent of total sales, on average, lost orders (according to Cincom Systems); the close rate on leads for customized products are unknown or very low; and the customer satisfaction is low because of escalating lead times and an invisible “cost of sale.” Although a bid preparation is a costly exercise (which, according to Cincom, amounts to an average of up to 15 percent of the total contract revenue), specialist knowledge is needed to create the bid. This requires high levels of “expert” hours, with teams often having a dozen or more key members that spend over a thousand hours on high-complexity bids.
However, attaining a perfect order in such environments is certainly not impossible (if seamless integration and visibility is achieved within the entire supply chain), and it can result in a much more satisfied customer than in the case of mass produced products' sales. The real key to successfully selling complex products and services lies in addressing the underlying issue—the need to capture knowledge (intellectual property) from wherever it is held in the organization, and to make that knowledge available to those who need it, whenever and wherever they might be.
SOURCE:
http://www.technologyevaluation.com/research/articles/the-complexities-of-quote-to-order-and-possible-solutions-19150/
Friday, October 1, 2010
Your Guide to Enterprise Software Selection: Part One
IT acquisition and purchasing decisions are often conducted in an atmosphere of unmet expectations, internal political agendas, vendor promises, and brand name hype. Decisions are driven by executive mandate, rule-of-thumb, or insufficient analyses based on rudimentary spreadsheet comparisons.
This is a sure recipe for failure, as demonstrated by the horror stories published continually in trade magazines and the press. We'll describe a best-practice approach to the assessment, evaluation, and selection of software—and show you how you can reduce the time and cost involved in objectively choosing the right solution.
There are three main phases within Technology Evaluation Centers' (TEC's) software assessment, evaluation, and selection methodology:
Phase 1: Defining Business and Technical Requirements
Phase 2: Software Evaluation and Analysis
Phase 3: Negotiation and Final Selection
Overview
Phase 1
TEC's methodology establishes the foundation for the ultimate success of the selection project. Successful evaluation and analysis of a system—and negotiation with a vendor—are irrelevant if the initial definition of business and technical requirements are incomplete or inaccurate. In many software selection projects, there is not enough emphasis on the importance of this phase, which causes many failures, and can even result in disaster for companies during and after implementation.
TEC's decision support system facilitates fast and accurate compilation of business processes, and maps them to the features and functions of a software solution. By closely following the steps outlined within this phase, an organization can produce a complete and understandable specification of all the needs that are to be addressed by the new solution, and is able to keep the assembled data in one easily accessible repository.
Phase 2
The evaluation and analysis of vendor solutions should proceed from finding the right vendors through to selecting a shortlist of two or three finalists. The sheer mass of data collected during this phase can be overwhelming for any organization, and the manipulation of the data even more daunting.
There may be as many as 20 or 30 qualified vendors, and each may have a list of thousands of criteria, all of which have to be evaluated one against the other. Using traditional methods can lead to serious errors—and may lead to choosing the wrong vendor solution. We'll show you how TEC's decision support system alleviates this process and seriously reduces the time required to reach a more informed and accurate choice of the right vendors to include in the shortlist.
Phase 3
The final phase covers the steps within the negotiation and the final selection process with the short-listed vendors. This includes live vendor demonstrations at the client site, where each solution can be rated by the business and selection team to verify ease-of-use, coverage of critical business processes, and functionality.
During this phase, we suggest that your selection team seek out client references from each vendor to verify their implementation, service, support, and training experiences. We'll explain how TEC's decision support system facilitates and shortens this process by loading vendor information into TEC's comparison tool to produce reports and graphs, which will support your selection team's final recommendations.
Phase 1: How to Define Your Business and Technical Requirements
Typical enterprise application selections begin with little mention of technology, since the first consideration is modeling the desired business processes that the new technology will enable, and then matching them to the functional requirements within any given software solution. TEC uses a standardized methodology to model and match these processes. The following steps are critical to ensuring overall success within this phase.
Step 1: Form a Cross-functional Project Team
A cross-functional team ensures that both the business and technical needs of your organization are addressed, and that each group affected by the changes understands the impact of the decision. The ideal team consists of members of the following groups: management; finance or business operations; users; consultants; and members of the IT operations and infrastructure groups.
Champions and subject matter experts (SMEs) should be chosen from each business area to work with the project team. This will ensure complete buy-in from the business side and help promote the new solution within the rest of the organization, as well as provide expert knowledge within the project team on existing processes and day-to-day operations.
Step 2: Model Business Processes Hierarchy through an Internal Needs Assessment
The project team, with the help of the champions and the SMEs, is responsible for defining and modeling business processes. The first goal is to determine the main process groups, which correspond to the individual business areas of the organization.
Within these groups, processes correspond to the high-level divisions of your business areas (see figures 1 and 2 below). Within these processes, subprocesses detail the main departments of the high-level divisions. Subprocesses include the day-to-day tasks within each department. For each activity, there may be business-based rules describing how these day-to-day tasks are to be performed and controlled.
This large volume of data is difficult to track, organize, and manipulate using traditional methods, such as spreadsheets, word documents, and flow charts. But if this critical information is not properly stored, organized, or made easily accessible, it can cause huge time delays—which in turn can substantially increase the cost of the software selection project.
SOURCE:
http://www.technologyevaluation.com/research/articles/your-guide-to-enterprise-software-selection-part-one-19204/
This is a sure recipe for failure, as demonstrated by the horror stories published continually in trade magazines and the press. We'll describe a best-practice approach to the assessment, evaluation, and selection of software—and show you how you can reduce the time and cost involved in objectively choosing the right solution.
There are three main phases within Technology Evaluation Centers' (TEC's) software assessment, evaluation, and selection methodology:
Phase 1: Defining Business and Technical Requirements
Phase 2: Software Evaluation and Analysis
Phase 3: Negotiation and Final Selection
Overview
Phase 1
TEC's methodology establishes the foundation for the ultimate success of the selection project. Successful evaluation and analysis of a system—and negotiation with a vendor—are irrelevant if the initial definition of business and technical requirements are incomplete or inaccurate. In many software selection projects, there is not enough emphasis on the importance of this phase, which causes many failures, and can even result in disaster for companies during and after implementation.
TEC's decision support system facilitates fast and accurate compilation of business processes, and maps them to the features and functions of a software solution. By closely following the steps outlined within this phase, an organization can produce a complete and understandable specification of all the needs that are to be addressed by the new solution, and is able to keep the assembled data in one easily accessible repository.
Phase 2
The evaluation and analysis of vendor solutions should proceed from finding the right vendors through to selecting a shortlist of two or three finalists. The sheer mass of data collected during this phase can be overwhelming for any organization, and the manipulation of the data even more daunting.
There may be as many as 20 or 30 qualified vendors, and each may have a list of thousands of criteria, all of which have to be evaluated one against the other. Using traditional methods can lead to serious errors—and may lead to choosing the wrong vendor solution. We'll show you how TEC's decision support system alleviates this process and seriously reduces the time required to reach a more informed and accurate choice of the right vendors to include in the shortlist.
Phase 3
The final phase covers the steps within the negotiation and the final selection process with the short-listed vendors. This includes live vendor demonstrations at the client site, where each solution can be rated by the business and selection team to verify ease-of-use, coverage of critical business processes, and functionality.
During this phase, we suggest that your selection team seek out client references from each vendor to verify their implementation, service, support, and training experiences. We'll explain how TEC's decision support system facilitates and shortens this process by loading vendor information into TEC's comparison tool to produce reports and graphs, which will support your selection team's final recommendations.
Phase 1: How to Define Your Business and Technical Requirements
Typical enterprise application selections begin with little mention of technology, since the first consideration is modeling the desired business processes that the new technology will enable, and then matching them to the functional requirements within any given software solution. TEC uses a standardized methodology to model and match these processes. The following steps are critical to ensuring overall success within this phase.
Step 1: Form a Cross-functional Project Team
A cross-functional team ensures that both the business and technical needs of your organization are addressed, and that each group affected by the changes understands the impact of the decision. The ideal team consists of members of the following groups: management; finance or business operations; users; consultants; and members of the IT operations and infrastructure groups.
Champions and subject matter experts (SMEs) should be chosen from each business area to work with the project team. This will ensure complete buy-in from the business side and help promote the new solution within the rest of the organization, as well as provide expert knowledge within the project team on existing processes and day-to-day operations.
Step 2: Model Business Processes Hierarchy through an Internal Needs Assessment
The project team, with the help of the champions and the SMEs, is responsible for defining and modeling business processes. The first goal is to determine the main process groups, which correspond to the individual business areas of the organization.
Within these groups, processes correspond to the high-level divisions of your business areas (see figures 1 and 2 below). Within these processes, subprocesses detail the main departments of the high-level divisions. Subprocesses include the day-to-day tasks within each department. For each activity, there may be business-based rules describing how these day-to-day tasks are to be performed and controlled.
This large volume of data is difficult to track, organize, and manipulate using traditional methods, such as spreadsheets, word documents, and flow charts. But if this critical information is not properly stored, organized, or made easily accessible, it can cause huge time delays—which in turn can substantially increase the cost of the software selection project.
SOURCE:
http://www.technologyevaluation.com/research/articles/your-guide-to-enterprise-software-selection-part-one-19204/
Who’s Got the Better Windows Office Suite? Corel or Microsoft?
The subject of this note is the never-ending question within desktop office suites, " What's better, Corel's or Microsoft's?" Generally, this question is answered from an emotional perspective, based entirely on the specific administrator's and/or end users comfort level. There is no one correct answer, both desktop office suites excel in specific areas and pale in others. The contents of this note will pit the two systems against each other in four specific areas:
* Product Functionality: Feature functions contained within the product
* Product Technology: Protocols, databases, and platforms
* Product Cost: Initial cost of training, implementation, and support
* Service and Support: Vendor support following purchase and implementation
Product Strategy and Trajectory:
TEC analysts began assessing the pros and cons of both office suites through the construction of a detailed information repository with over 300 detail-level criteria, arranged hierarchically in our proprietary software-modeling tool, TESS. Each hierarchical category within the model is assigned a value, which represents its priority relative to other categories, or "weight". Figure 1 shows weights for the top-level categories in the Desktop 2000 Office Suite Model.
Figure I Top Level Rating
Figure II represents Product Functionality
versus Product Technology
In functionality and product technology Microsoft's Office 2000 takes a slight lead. This is primarily due to the advanced web based integration features and integration with the standard Microsoft Windows desktop. In addition, Microsoft Office 2000 includes an e-mail client (Outlook 2000), which is lacking from Corel's offering. Corel excels in ease of use and reduced training costs. Overall, both suites offer a plethora of features from advanced desktop publishing to robust databases.
Corel WordPerfect Office 2000 takes the edge in enhanced accessibility through the inclusion of Dragon Software's Naturally Speaking application, which allows a user to "talk" to the application rather than type. In addition, the Corel 2000 Suite includes a hardware component headset/microphone combo intended for speech recognition.
Figure III represents Product Functionality
versus Product Cost
Corel's WordPerfect 2000 Office Suite Standard is competitively priced at $299.95 (MSRP-USD) as opposed to Microsoft Office 2000 Small Business edition priced at $349.95 (MSRP-USD). However, both Microsoft and Corel's top of the line Office Suites are both $449.95 (MSRP-USD), eliminating any price edge Corel may have had at the Professional Office Level. As can be seen from the above graph, both suites perform well given their relative cost.
Figure IV represents Product Cost
versus Service and Support
Corel maintains a slight edge in cost, while maintaining a very respectable support rating. Microsoft's Office support takes the lead with its robust web support, including an office software update page, a heavily production-tested and experienced support system via telephone (albeit 80% outsourced) and onsite support when entirely necessary. Corel offers web support but it pales in comparison to Microsoft's site in terms of content and navigability. Corel's telephone and onsite support offers trained professionals for both on and off site support, none of which is outsourced.
SOURCE:
http://www.technologyevaluation.com/research/articles/who-s-got-the-better-windows-office-suite-corel-or-microsoft-15750/
* Product Functionality: Feature functions contained within the product
* Product Technology: Protocols, databases, and platforms
* Product Cost: Initial cost of training, implementation, and support
* Service and Support: Vendor support following purchase and implementation
Product Strategy and Trajectory:
TEC analysts began assessing the pros and cons of both office suites through the construction of a detailed information repository with over 300 detail-level criteria, arranged hierarchically in our proprietary software-modeling tool, TESS. Each hierarchical category within the model is assigned a value, which represents its priority relative to other categories, or "weight". Figure 1 shows weights for the top-level categories in the Desktop 2000 Office Suite Model.
Figure I Top Level Rating
Figure II represents Product Functionality
versus Product Technology
In functionality and product technology Microsoft's Office 2000 takes a slight lead. This is primarily due to the advanced web based integration features and integration with the standard Microsoft Windows desktop. In addition, Microsoft Office 2000 includes an e-mail client (Outlook 2000), which is lacking from Corel's offering. Corel excels in ease of use and reduced training costs. Overall, both suites offer a plethora of features from advanced desktop publishing to robust databases.
Corel WordPerfect Office 2000 takes the edge in enhanced accessibility through the inclusion of Dragon Software's Naturally Speaking application, which allows a user to "talk" to the application rather than type. In addition, the Corel 2000 Suite includes a hardware component headset/microphone combo intended for speech recognition.
Figure III represents Product Functionality
versus Product Cost
Corel's WordPerfect 2000 Office Suite Standard is competitively priced at $299.95 (MSRP-USD) as opposed to Microsoft Office 2000 Small Business edition priced at $349.95 (MSRP-USD). However, both Microsoft and Corel's top of the line Office Suites are both $449.95 (MSRP-USD), eliminating any price edge Corel may have had at the Professional Office Level. As can be seen from the above graph, both suites perform well given their relative cost.
Figure IV represents Product Cost
versus Service and Support
Corel maintains a slight edge in cost, while maintaining a very respectable support rating. Microsoft's Office support takes the lead with its robust web support, including an office software update page, a heavily production-tested and experienced support system via telephone (albeit 80% outsourced) and onsite support when entirely necessary. Corel offers web support but it pales in comparison to Microsoft's site in terms of content and navigability. Corel's telephone and onsite support offers trained professionals for both on and off site support, none of which is outsourced.
SOURCE:
http://www.technologyevaluation.com/research/articles/who-s-got-the-better-windows-office-suite-corel-or-microsoft-15750/
The Path to ERP for Small Businesses, Part 3: Selection of ERP Software
Parts 1 and 2 of this series described the processes of research and evaluation of enterprise resource planning (ERP) software. At the end of these two stages, you should have a pretty good idea which type of software might fit the needs of your organization and which vendors might provide this solution. Part 3 will describe the final stage—selecting the software that best fits your specific needs.
You started by defining the main activities and workflows in your company, then you created more detailed criteria lists, compared different products, and probably used a decision support system (DSS) to create a shortlist (list of vendors that are the best fit for your organization). Even when using the most complex DSS, some aspects of your business might still be overlooked; thus it's important to supplement your comparison by seeing the products demonstrated, performing reference checks, and reviewing other related information.
Major Steps in the ERP Selection Process
You benefit from enterprise software only when you make the right selection. By using accurate and relevant criteria on enterprise software functionality, you are better informed of your options. Using a suitable analysis process, your selection team can make accurate assessments about how well a vendor can meet your needs, which should ensure that you select the most appropriate enterprise software.
The most important steps in the selection phase are activities related to creating scripted scenarios based on your most important business requirements:
• issuing a request for proposal (RFP) (including costing information),
• inviting vendors for a site visit,
• conducting vendor demos and proof of concept,
• evaluating vendors’ implementation strategies,
• conducting a total cost of ownership (TCO) analysis,
• identifying the best-fit solution,
• developing an audit report of the selection process,
• obtaining executive approval,
• notifying winning and losing vendors,
• performing reference checks, and
• negotiating the contract.
1. Vendor Product Demos
The most important thing to do during the vendor product demonstration is to take control of the process. In order to do that, you should create a demo script for the vendor that allows them to show you how the system handles your main requirements, step-by-step. This will give you control over the demo and the vendor will have to demonstrate how it covers the functionality that is the most important for you. Depending on the complexity of your business, be ready to spend a significant amount of time viewing vendor demonstrations.
Of course, the demo script should cover the most important processes. You should only request details when the functionality demonstrated is essential for you and your company. The demonstration is also an opportunity to evaluate each product on its qualitative aspects, such as ease-of-use. Also, don’t forget to rate the product—ideally for each functionality demonstrated—so you can compare products afterwards. Here’s what a typical demonstration script might look like for order entry:
Please demonstrate the following:
Criterion
Supported
(Y/N)
Sales
1.1.1 Quickly create a sales order (SO) from scratch
1.1.2 Quickly create a SO from a quote
1.1.3 Quickly create a SO from an existing sales order (duplicate)
1.2 Picking
1.2.1 Check available-to-promise before picking
1.2.2 Convert a SO to a picking list
1.2.3 Convert a picking list to an invoice
1.3 Invoicing
1.3.1 Modify discount and prices on the invoice
1.3.2 Warn users when there are credit issues
1.3.3 Option to print packing list when the invoice is generated
1.1.3 Quickly create a SO from an existing sales order (duplicate)
4 Qualitative Assessment
4.1 Ease-of-use
4.2 Process fit
4.3 Degree of process improvement
Once this is done, remember that a demo can only cover functionality, therefore you should also consider technical factors for the solution, such as operating system, database support, delivery model (on premise, on demand, software as a service (SaaS), integration with other systems (e.g., accounting, customer relationship management [CRM], etc.), multisite management, security, device interface management, and application tools (programs which can be used to manage or develop the software).
2. The Shortlist
Before reviewing the product demonstration you probably had a list of ten or more vendors who claimed that they can do most of the things you need for your company. If conducted in a proper manner, the demo and the technical criteria mentioned above should bring the list down to no more than three or five vendors.
There are other factors that can make your list even shorter, and some of them are related to the vendor’s capability to deliver:
• Implementation: The product may be great, but if it can be implemented in a year and you need it up and running in six months, the vendor will be disqualified. Also, if you’re not happy with the implementation methodology your vendor has or if the references are really bad, you may want to think twice before working with them.
• Post-implementation training and support: If you’re in North America and your vendor only has offices in Europe and Asia, they will probably have a hard time responding to your requests and they may not deliver quality training and support.
• Competitive pricing: This can make a huge difference when selecting the vendors for your shortlist. The best solution in the world will not be enough to justify an exorbitant price, but you should also be careful when the price a vendor offers is extremely low and make sure you understand how much you’re going to pay after the promotional period is over.
• Consulting services: Change management, business processes development, post- implementation auditing, can be done by the vendor or third-party providers having partnerships with the vendor. Depending on how much you need consulting, this can be an important factor when selecting among several vendors offering similar functionality.
3. The Winner
After taking into account the different types of criteria (functional, technical, financial, etc.), you should find one vendor that can not only provide you with the best software for your needs, but will also implement it on time, will be able to fix bugs, answer questions promptly, and can also help you redefine your business processes.
If at the end of the process you are still hesitating between several vendors, you should review some of the steps or go into more detail on what’s really important for you and hasn’t been covered thoroughly (e.g., you need to import data from another system every week, you do backups every 12 hours, your partners need access to a portal to exchange information with you, etc.).
But even when you think you found the best solution, there are a few things you should do to make sure:
• Install a demo version of the product that people can use before going live and avoid going live with the new system while still using the old one.
• Get feedback from users on what’s missing and what could be improved in the new system and communicate it to the vendor.
• Keep track of the steps required during the implementation and take corrective actions when important actions are not done on time.
• Make sure the entire data you need to function properly gets imported before even considering going live—sometimes, it is better to delay the live date than to fix problems later.
Conclusion
There are no good or bad ERP solutions, but only very few of them will work for you. This is why all three stages described in this series of articles are extremely important for you to research, evaluate, and select the best product for your company’s needs.
Often times, selecting an ERP solution is a compromise, but you should make sure that you do not compromise on functionality or characteristics of the solution that can have a great impact on your company in the future and make you lose money if the investment in the software does not bring the expected result.
And finally, remember that these three stages of a software selection and evaluation process can only give very good results when used together. If you treat any of them lightly, it may affect the entire process and the end result (e.g., the software you selected) may not be what you were looking for.
SOURCE:
http://www.technologyevaluation.com/research/articles/the-path-to-erp-for-small-businesses-part-3-selection-of-erp-software-21237/
You started by defining the main activities and workflows in your company, then you created more detailed criteria lists, compared different products, and probably used a decision support system (DSS) to create a shortlist (list of vendors that are the best fit for your organization). Even when using the most complex DSS, some aspects of your business might still be overlooked; thus it's important to supplement your comparison by seeing the products demonstrated, performing reference checks, and reviewing other related information.
Major Steps in the ERP Selection Process
You benefit from enterprise software only when you make the right selection. By using accurate and relevant criteria on enterprise software functionality, you are better informed of your options. Using a suitable analysis process, your selection team can make accurate assessments about how well a vendor can meet your needs, which should ensure that you select the most appropriate enterprise software.
The most important steps in the selection phase are activities related to creating scripted scenarios based on your most important business requirements:
• issuing a request for proposal (RFP) (including costing information),
• inviting vendors for a site visit,
• conducting vendor demos and proof of concept,
• evaluating vendors’ implementation strategies,
• conducting a total cost of ownership (TCO) analysis,
• identifying the best-fit solution,
• developing an audit report of the selection process,
• obtaining executive approval,
• notifying winning and losing vendors,
• performing reference checks, and
• negotiating the contract.
1. Vendor Product Demos
The most important thing to do during the vendor product demonstration is to take control of the process. In order to do that, you should create a demo script for the vendor that allows them to show you how the system handles your main requirements, step-by-step. This will give you control over the demo and the vendor will have to demonstrate how it covers the functionality that is the most important for you. Depending on the complexity of your business, be ready to spend a significant amount of time viewing vendor demonstrations.
Of course, the demo script should cover the most important processes. You should only request details when the functionality demonstrated is essential for you and your company. The demonstration is also an opportunity to evaluate each product on its qualitative aspects, such as ease-of-use. Also, don’t forget to rate the product—ideally for each functionality demonstrated—so you can compare products afterwards. Here’s what a typical demonstration script might look like for order entry:
Please demonstrate the following:
Criterion
Supported
(Y/N)
Sales
1.1.1 Quickly create a sales order (SO) from scratch
1.1.2 Quickly create a SO from a quote
1.1.3 Quickly create a SO from an existing sales order (duplicate)
1.2 Picking
1.2.1 Check available-to-promise before picking
1.2.2 Convert a SO to a picking list
1.2.3 Convert a picking list to an invoice
1.3 Invoicing
1.3.1 Modify discount and prices on the invoice
1.3.2 Warn users when there are credit issues
1.3.3 Option to print packing list when the invoice is generated
1.1.3 Quickly create a SO from an existing sales order (duplicate)
4 Qualitative Assessment
4.1 Ease-of-use
4.2 Process fit
4.3 Degree of process improvement
Once this is done, remember that a demo can only cover functionality, therefore you should also consider technical factors for the solution, such as operating system, database support, delivery model (on premise, on demand, software as a service (SaaS), integration with other systems (e.g., accounting, customer relationship management [CRM], etc.), multisite management, security, device interface management, and application tools (programs which can be used to manage or develop the software).
2. The Shortlist
Before reviewing the product demonstration you probably had a list of ten or more vendors who claimed that they can do most of the things you need for your company. If conducted in a proper manner, the demo and the technical criteria mentioned above should bring the list down to no more than three or five vendors.
There are other factors that can make your list even shorter, and some of them are related to the vendor’s capability to deliver:
• Implementation: The product may be great, but if it can be implemented in a year and you need it up and running in six months, the vendor will be disqualified. Also, if you’re not happy with the implementation methodology your vendor has or if the references are really bad, you may want to think twice before working with them.
• Post-implementation training and support: If you’re in North America and your vendor only has offices in Europe and Asia, they will probably have a hard time responding to your requests and they may not deliver quality training and support.
• Competitive pricing: This can make a huge difference when selecting the vendors for your shortlist. The best solution in the world will not be enough to justify an exorbitant price, but you should also be careful when the price a vendor offers is extremely low and make sure you understand how much you’re going to pay after the promotional period is over.
• Consulting services: Change management, business processes development, post- implementation auditing, can be done by the vendor or third-party providers having partnerships with the vendor. Depending on how much you need consulting, this can be an important factor when selecting among several vendors offering similar functionality.
3. The Winner
After taking into account the different types of criteria (functional, technical, financial, etc.), you should find one vendor that can not only provide you with the best software for your needs, but will also implement it on time, will be able to fix bugs, answer questions promptly, and can also help you redefine your business processes.
If at the end of the process you are still hesitating between several vendors, you should review some of the steps or go into more detail on what’s really important for you and hasn’t been covered thoroughly (e.g., you need to import data from another system every week, you do backups every 12 hours, your partners need access to a portal to exchange information with you, etc.).
But even when you think you found the best solution, there are a few things you should do to make sure:
• Install a demo version of the product that people can use before going live and avoid going live with the new system while still using the old one.
• Get feedback from users on what’s missing and what could be improved in the new system and communicate it to the vendor.
• Keep track of the steps required during the implementation and take corrective actions when important actions are not done on time.
• Make sure the entire data you need to function properly gets imported before even considering going live—sometimes, it is better to delay the live date than to fix problems later.
Conclusion
There are no good or bad ERP solutions, but only very few of them will work for you. This is why all three stages described in this series of articles are extremely important for you to research, evaluate, and select the best product for your company’s needs.
Often times, selecting an ERP solution is a compromise, but you should make sure that you do not compromise on functionality or characteristics of the solution that can have a great impact on your company in the future and make you lose money if the investment in the software does not bring the expected result.
And finally, remember that these three stages of a software selection and evaluation process can only give very good results when used together. If you treat any of them lightly, it may affect the entire process and the end result (e.g., the software you selected) may not be what you were looking for.
SOURCE:
http://www.technologyevaluation.com/research/articles/the-path-to-erp-for-small-businesses-part-3-selection-of-erp-software-21237/
A Case Study and Tutorial in Using IT Knowledge Based Tools Part 1: Decision Support Discussion
Most business managers, whether vendors, vendor clients or implementers, are unaware of the fundamental capabilities that knowledge based decision support can provide to minimize project risk for all sides of technology utilization. Given that over 90% of IT projects fail on first attempt, according to the Standish Group, more thought and research on the evaluation and selection process is needed. Many of these failures - some 30% - are the direct result of poor selections, and represent upward of $30 billion in wasted investment annually.
On the vendor side, the challenge of educating the potential client of their offerings results in long sales cycles, meticulous and numerous RFI responses, and potential for a mismatch, resulting in projects that can go awry. These failed projects do not bode well for the vendor, since the sales cycle costs can only rise, and their reputation can suffer. Consequences can be more severe for the client where it can, in extreme cases, lead to business failure. For implementers, the issue is similar: having inadequate information for the implementation phase means an inability to properly plan and execute the implementation, or for a consultant to assist the end client in making proper technology decisions. Implementers (which can be internal IT departments as well as consultants) can also find that decision-maker indecision leads to lengthened sales cycles, missed opportunities, and risk of competitive intrusion. The root cause of this indecision is an inability of the implementer to give confidence to the stakeholders of their choice of solution.
All sides need thought and research to build data and process information in a meaningful context, which takes time and costs money for all participants going through the selection process. But without spending time, thought, research and money there is increased business risk to all.
To cut away from this devil-and-the-deep-blue-sea conundrum means looking under the hood of evaluation and selection practices, to determine if there are better ways of moving through them. There is certainly room to ask the fundamental question of whether the current practice of RFI / RFP processes, among other internal organizational procedures, are adequate to the task of selecting complex systems. The record indicates there is much room for improvement.
In essence, for complex selections, the human-machine combination has to work together to drive the solution. Both have to be understood and complement each other in the process. It is easy for the human to be overwhelmed, or simply run out of time, and the machine interface and engine to be inadequate to the task. However, the results must benefit the process if human and machine can function effectively together to process information and avoid the pitfalls of past selection processes.
In the second part of this article, we shall follow a simplified process as an illustration. This method was used by the author to conduct the selection on a personal device assistant (PDA). Though a PDA is far less complex than an ERP system, processes and procedures enabling narrowing down of solutions, and avoiding dissatisfaction, while taking on assessed risks, are part of the process embedded in Knowledge Based Selection methods.
About This Note: This is a two part note with Part 1 containing a discussion of the use of an IT Knowledge Based selection tool as part of a Decision Support System selection process. Part 2 is a tutorial which illustrates using such a system to select the personal device assistant (PDA).
Overview of Decision Support System
Traditionally, DSSs (Decision Support Systems) have largely been used for internal corporate support. However, there is a growing trend to combine DSS and knowledge bases for product and project evaluation that can benefit all sides, leading to a methodology called Knowledge Based Selection. Getting the methods and the technology right is important. This is the main focus of TECs value proposition through its research and tools development programs.
Maximizing the benefits from using knowledge driven selection processes requires two key components: accurate data and a clear process enabling stakeholders to navigate through the data to get to a solution. If the system provides these capabilities, the benefits can include:
1. Narrowing products down to a shortlist. Vendors benefit from not pursuing unfruitful clients, and clients benefit because the short list is usually reduced to a manageable size
2. Entering the end client business scenario early on enables a better fit and more rapid narrowing of product match
3. Identification of issues and negotiation perspectives are brought to the front, enabling more efficient and productive negotiations
4. Enabling the construction of scenarios and measuring scenario performance to reach the final decision
5. Building confidence in the decision among the client team
6. Building buy-in to a decision at the client site, easing political obstacles to the selection
7. Enabling the solution implementers to be better aware of the challenges
8. Enabling vendors to be aware of product gaps with client needs
9. Enabling expectations of the implementation results to be realistic
10. Enable better implementation planning
11. Creating a more reliable and realistic outcome
12. Enable future project discussions between the vendor and client to be processed more effectively, since past data is intact and in a form that is reusable and can be updated easily.
The result of the exercise is a decision in which the business risk is minimized and stakeholders have reached consensus, and mutual understanding in the minimum time. Implementers are more thoroughly aware of the issues they face, and the vendor has a better customer relationship as a result, leading to potentially more future business.
Knowledge Based Selection is a Tool
The last thing a knowledge based selection method does is to make the decision for you. It is a tool that is part of a process, not the complete process. However, it can be a very revealing component essential in the overall quality of the result. The method consists of ways to rationally input information, and then to evaluate the information according to the value requirements of the stakeholders. Hence a component in the mix is a knowledge base to store information, and an evaluation engine then enables the stakeholders to navigate through it and estimate each solution's value and risk in the context of stakeholder requirements.
Intrinsic processes within the evaluation engine must enable at least five things:
1. Enable the inclusion of the value proposition to the end user
2. Enable a narrowing down to a few solutions with high probability of delivering core technology
3. Highlight the differences among the lead solutions to better understand the business tradeoffs that may have to be made
4. Enable a better and deeper understanding of the selected solution
5. Give confidence that the selected solution will meet at least minimum needs
Over the past few years, many decision support tools and systems (DSSs) have appeared on the Internet. In IT, most of these are based on 'value trees'. Value trees are intended to accurately measure the degree of worth of a solution to a business case, and if done correctly, will reflect the value proposition of a solution to the required solution. From the science perspective, most online DSS systems are simple and rarely provide the insight needed in making major decisions, suffering from at least one of five major flaws in IT solutions selection:
1. Methodologies do not adequately represent the value propositions that need to be met for each business case.
2. The depth of information (content) is inadequate.
3. The processing is done from a features and functions level, not a business objectives and required capabilities level
4. The processes to uncover and make sense of content are inadequate.
5. Vendor client match methods lacks appropriate internal processes. This often leaves many good niche players swamped by larger organizations who can claim they 'do everything': niche players do some things very well, and generally should be considered in particular business scenarios.
SOURCE:
http://www.technologyevaluation.com/research/articles/a-case-study-and-tutorial-in-using-it-knowledge-based-tools-part-1-decision-support-discussion-16387/
On the vendor side, the challenge of educating the potential client of their offerings results in long sales cycles, meticulous and numerous RFI responses, and potential for a mismatch, resulting in projects that can go awry. These failed projects do not bode well for the vendor, since the sales cycle costs can only rise, and their reputation can suffer. Consequences can be more severe for the client where it can, in extreme cases, lead to business failure. For implementers, the issue is similar: having inadequate information for the implementation phase means an inability to properly plan and execute the implementation, or for a consultant to assist the end client in making proper technology decisions. Implementers (which can be internal IT departments as well as consultants) can also find that decision-maker indecision leads to lengthened sales cycles, missed opportunities, and risk of competitive intrusion. The root cause of this indecision is an inability of the implementer to give confidence to the stakeholders of their choice of solution.
All sides need thought and research to build data and process information in a meaningful context, which takes time and costs money for all participants going through the selection process. But without spending time, thought, research and money there is increased business risk to all.
To cut away from this devil-and-the-deep-blue-sea conundrum means looking under the hood of evaluation and selection practices, to determine if there are better ways of moving through them. There is certainly room to ask the fundamental question of whether the current practice of RFI / RFP processes, among other internal organizational procedures, are adequate to the task of selecting complex systems. The record indicates there is much room for improvement.
In essence, for complex selections, the human-machine combination has to work together to drive the solution. Both have to be understood and complement each other in the process. It is easy for the human to be overwhelmed, or simply run out of time, and the machine interface and engine to be inadequate to the task. However, the results must benefit the process if human and machine can function effectively together to process information and avoid the pitfalls of past selection processes.
In the second part of this article, we shall follow a simplified process as an illustration. This method was used by the author to conduct the selection on a personal device assistant (PDA). Though a PDA is far less complex than an ERP system, processes and procedures enabling narrowing down of solutions, and avoiding dissatisfaction, while taking on assessed risks, are part of the process embedded in Knowledge Based Selection methods.
About This Note: This is a two part note with Part 1 containing a discussion of the use of an IT Knowledge Based selection tool as part of a Decision Support System selection process. Part 2 is a tutorial which illustrates using such a system to select the personal device assistant (PDA).
Overview of Decision Support System
Traditionally, DSSs (Decision Support Systems) have largely been used for internal corporate support. However, there is a growing trend to combine DSS and knowledge bases for product and project evaluation that can benefit all sides, leading to a methodology called Knowledge Based Selection. Getting the methods and the technology right is important. This is the main focus of TECs value proposition through its research and tools development programs.
Maximizing the benefits from using knowledge driven selection processes requires two key components: accurate data and a clear process enabling stakeholders to navigate through the data to get to a solution. If the system provides these capabilities, the benefits can include:
1. Narrowing products down to a shortlist. Vendors benefit from not pursuing unfruitful clients, and clients benefit because the short list is usually reduced to a manageable size
2. Entering the end client business scenario early on enables a better fit and more rapid narrowing of product match
3. Identification of issues and negotiation perspectives are brought to the front, enabling more efficient and productive negotiations
4. Enabling the construction of scenarios and measuring scenario performance to reach the final decision
5. Building confidence in the decision among the client team
6. Building buy-in to a decision at the client site, easing political obstacles to the selection
7. Enabling the solution implementers to be better aware of the challenges
8. Enabling vendors to be aware of product gaps with client needs
9. Enabling expectations of the implementation results to be realistic
10. Enable better implementation planning
11. Creating a more reliable and realistic outcome
12. Enable future project discussions between the vendor and client to be processed more effectively, since past data is intact and in a form that is reusable and can be updated easily.
The result of the exercise is a decision in which the business risk is minimized and stakeholders have reached consensus, and mutual understanding in the minimum time. Implementers are more thoroughly aware of the issues they face, and the vendor has a better customer relationship as a result, leading to potentially more future business.
Knowledge Based Selection is a Tool
The last thing a knowledge based selection method does is to make the decision for you. It is a tool that is part of a process, not the complete process. However, it can be a very revealing component essential in the overall quality of the result. The method consists of ways to rationally input information, and then to evaluate the information according to the value requirements of the stakeholders. Hence a component in the mix is a knowledge base to store information, and an evaluation engine then enables the stakeholders to navigate through it and estimate each solution's value and risk in the context of stakeholder requirements.
Intrinsic processes within the evaluation engine must enable at least five things:
1. Enable the inclusion of the value proposition to the end user
2. Enable a narrowing down to a few solutions with high probability of delivering core technology
3. Highlight the differences among the lead solutions to better understand the business tradeoffs that may have to be made
4. Enable a better and deeper understanding of the selected solution
5. Give confidence that the selected solution will meet at least minimum needs
Over the past few years, many decision support tools and systems (DSSs) have appeared on the Internet. In IT, most of these are based on 'value trees'. Value trees are intended to accurately measure the degree of worth of a solution to a business case, and if done correctly, will reflect the value proposition of a solution to the required solution. From the science perspective, most online DSS systems are simple and rarely provide the insight needed in making major decisions, suffering from at least one of five major flaws in IT solutions selection:
1. Methodologies do not adequately represent the value propositions that need to be met for each business case.
2. The depth of information (content) is inadequate.
3. The processing is done from a features and functions level, not a business objectives and required capabilities level
4. The processes to uncover and make sense of content are inadequate.
5. Vendor client match methods lacks appropriate internal processes. This often leaves many good niche players swamped by larger organizations who can claim they 'do everything': niche players do some things very well, and generally should be considered in particular business scenarios.
SOURCE:
http://www.technologyevaluation.com/research/articles/a-case-study-and-tutorial-in-using-it-knowledge-based-tools-part-1-decision-support-discussion-16387/
Analysis of Adobe’s Integration of IslandData’s Automated E-mail
CARLSBAD, Calif.--(BUSINESS WIRE)--IslandData, a leading provider of automated response technology for the online customer service market, announced that it has signed Adobe Systems Inc. (Nasdaq: ADBE - news), the fourth largest desktop software company in the world, as a customer of IslandData's ExpressResponse, a commercial service that automates the process of quickly reading and responding to end user e-mail and web support requests.
Market Impact
Adobe is a well-known software manufacturer who produces common desktop utilities and applications such as Adobe Acrobat, Adobe Illustrator, Page Maker Plus and Adobe PhotoShop. Adobe's support site receives approximately 1.3 million client inquiries per month and has been in need of an automated response system to decrease escalating support costs. To alleviate the burden of manual responses to end users needs and concerns, Adobe has selected IslandData's e-mail automated response system.
IslandData's response system has met Adobe's needs through automated response systems, which takes less than 10 seconds to address a user's inquiry in addition to a dramatic decrease in cost. However, if a question requires support beyond the automated response system it is forwarded directly to the web support personnel. The system has reduced the web support team's manual responses by over 50% and has improved advanced support turn around time to less than 24 hours, where in the past it would take up to 14 days.
Cisco introduced a similar e-mail consumer management system called the Cisco eMail Manager. The Cisco product has a leg up on IslandData due to name recognition and corporate viability. However, Cisco's product is not inexpensive at $1500 (USD) per seat, which should give IslandData some breathing space to grow.
The e-mail response market is growing rapidly to accommodate the response needs of both online shoppers and individuals seeking a quick resolution to their question. The following chart indicates the growth of e-mail impacting the Internet on a yearly basis. The net result is that demand for automated client-communication technology is strong and growing. (Chart Source: IDC)
SOURCE:
http://www.technologyevaluation.com/research/articles/analysis-of-adobe-s-integration-of-islanddata-s-automated-e-mail-15628/
Market Impact
Adobe is a well-known software manufacturer who produces common desktop utilities and applications such as Adobe Acrobat, Adobe Illustrator, Page Maker Plus and Adobe PhotoShop. Adobe's support site receives approximately 1.3 million client inquiries per month and has been in need of an automated response system to decrease escalating support costs. To alleviate the burden of manual responses to end users needs and concerns, Adobe has selected IslandData's e-mail automated response system.
IslandData's response system has met Adobe's needs through automated response systems, which takes less than 10 seconds to address a user's inquiry in addition to a dramatic decrease in cost. However, if a question requires support beyond the automated response system it is forwarded directly to the web support personnel. The system has reduced the web support team's manual responses by over 50% and has improved advanced support turn around time to less than 24 hours, where in the past it would take up to 14 days.
Cisco introduced a similar e-mail consumer management system called the Cisco eMail Manager. The Cisco product has a leg up on IslandData due to name recognition and corporate viability. However, Cisco's product is not inexpensive at $1500 (USD) per seat, which should give IslandData some breathing space to grow.
The e-mail response market is growing rapidly to accommodate the response needs of both online shoppers and individuals seeking a quick resolution to their question. The following chart indicates the growth of e-mail impacting the Internet on a yearly basis. The net result is that demand for automated client-communication technology is strong and growing. (Chart Source: IDC)
SOURCE:
http://www.technologyevaluation.com/research/articles/analysis-of-adobe-s-integration-of-islanddata-s-automated-e-mail-15628/
Evaluating the Total Cost of Network Ownership
A bank devotes extensive resources to its computer network-both in human wherewithal and hard cash. The upfront costs can be high, and veiled costs compound the burden. Ultimately, an invisible price tag hangs from a computer network. Total cost of ownership (TCO) is a model that helps systems managers understand and handle the budgeted and unbudgeted costs of an IT component throughout its lifecycle.
The lifecycle of a network occurs in five stages:
* Design. The IT department evaluates needs, industry standards, and current technology.
* Acquire. This phase involves acquisition, configuration, and distribution services, as well as asset management.
* Integrate. The system is installed, and the project continually managed. Training and support plans are established.
* Support. Help desk services, maintenance support, and disaster recovery plans are arranged.
* Upgrade. At some point (often too soon), hardware and software becomes outdated, and needs upgrades.
The upfront expenses of a network comprise only 19% of the total cost. The remaining 81% can sneak up on bank management, often unaware of some subtle TCO factors.
Direct, Budgeted Costs
Budgeted costs are usually two-fold. They primarily consist of expenditures directly related to computing, like hardware and software. The second component of direct costs is labor, including Help Desk and technical personnel.
Bank management should budget for costs of all IS professionals directly managing and supporting the network, in addition to outsourced management and maintenance fees. On the support end, costs can be broken into Operations labor, Operations fees, and Help Desk. Operations labor includes management and administrative assistance needed for support. Casual learning and formal training of technical staff are factors, in addition to end-user training performed by the IS staff. There are also cost factors associated with travel and purchasing time.
Networks create and require extensive communications capabilities. These include remote access server fees, WAN costs allocated to the client/server systems, communication lines and device fees, and Internet service provider charges. All of these fees are included in budgeted costs.
Indirect, Unbudgeted Costs
The more elusive figures fall under the unbudgeted category. These include non-productive end-user time, troubleshooting, other IT tasks, and system downtime. Support and training make the system work for users, and the price of those services must be factored into the TCO. Management must calculate peer and self-support from the IS department. There are also costs related to casual learning, CBT, manuals, and online help. End user training can cause downtime and lost productivity.
Unbudgeted expenses often add enormously to the TCO. And, without understanding precisely what the costs arise from, bank management cannot control them. Fortunately, there is a way for Management to keep expenses in check. Knowledge establishes control. Awareness of the root causes for network expenditures gives Management and IT personnel the power to evaluate unacceptable conditions and change them.
10 Ways to Control the TCO
1. Standardize hardware and software purchases. Fewer technology platforms mean lower costs. Defining standards takes only upfront time, with periodic evaluations. As components wear out and become outdated, replace them uniformly across the organization. Upholding policies becomes the test. In the end, the strongest policy will fail without actions to enforce it. Defined standards will help the bank establish training requirements and reduce the costs of hardware upgrades.
2. Inventory all hardware and software. The network administrator needs to know the bank's computing environment for efficient decision-making. The information should be readily available to key people, and easily accessible in each department. The bank can improve its resource management practices by keeping a current catalog of hardware and software.
3. Reduce opportunities for trouble. Implementing explicit policies and profiles helps prevent users from delving into areas better left unexplored, and protects the integrity of the system. High security levels can:
* Prevent users from accidentally deleting critical files
* Keep users out of the Control Panel and the registry
* Keep virus protection software updated
* Keep users from installing unapproved software
* Monitor system activities
4. Implement an efficient Help Desk support system. Users will always need some technical support. Insufficient support is a leading complaint among computer users in banks and elsewhere. An efficient Help Desk will reduce the TCO and frustration at the same time. Some ways to facilitate efficiency are to:
* Implement a single phone number for all end users.
* Have lower-level technicians or a call coordinator answer the Help Desk calls.
* Install Help Desk software. (The benefits of a well-run Help Desk will spread throughout the operation.)
* Track all calls and solutions using specialized software.
* Take action on trouble PCs or end users. o Set minimum SLA levels for technicians.
5. Implement system management technologies. Banks can use technology to help manage technology. Implementing specialized products can help manage a network structure, including remote troubleshooting, application software distribution, and hardware and software inventories (asset management and software version control). Protocol analyzers can be employed to find chatty NICs and busy LAN segments. These watchdog products can isolate problems and inefficiencies early-long before the situation becomes detectable to the bank. This can save the bank enormous costs over the long term.
6. Minimize upgrades. Hardware and software upgrades are expensive. The bank can more cheaply purchase the power it needs upfront. Surprisingly, upgrading hardware and software often costs more than the initial purchase. Another tactic for controlling costs is to maintain software version control, and run only one version of software at a time.
7. Maintain a dependable infrastructure. A strong infrastructure is the foundation for a successful network. A weak structure causes problems that can affect large groups of people-not only individual users. The system should maintain ample bandwidth to key resources for high availability. Software is available to continually update network administrators of strains on the system.
8. Achieve total management support. TCO affects the entire operation, making bank management's support of network decisions critical. Departmental managers need ownership of a piece of TCO. The bank benefits by everyone feeling invested in the system, and taking responsibility for making it work. Since users are an integral part of a network, their buy-in is crucial. Users' enthusiasm about the benefits of network improvements can actually lower the TCO, through less downtime, faster learning, and more peer support.
9. Spread knowledge. The efficiency of the system increases proportionately with the training level of the staff. Users need education to learn how to make the most of the hardware and software that forms the network. Users should be encouraged to understand the network environment, directory structures, printing options, etc. The bank can maintain books, CBTs, and videos for reference and training.
10. Treat TCO as an ongoing issue. Reducing the TCO is not the goal in itself, but rather a catalyst for environmental improvements. As technology develops, the bank must adjust TCO methods to maximize cost reduction. Management can delegate part of the job of continually addressing TCO issues to someone in the bank with the knowledge and resources to curtail problems before they cost the bank money.
What Tools Can Help?
There are many tools that network managers can use to control and manage the TCO. Some specific products are:
# Microsoft Systems Management Server
# Novell Managewise or Z.E.N. Works
# NT Terminal Server/Citrix Metaframe
# Protocol analyzers like Microsoft Network Monitor, Novell Lanalyzer, and Network Associates Sniffer Pro (same product new name)
# Properly updated virus protection software
Evaluating A Bank's Current TCO
Networks around the country run the gamut from virtually worthless to very cost-efficient systems. IT components are continually being purchased and replaced. There is no single panacea for developing a successful network. A bank must evaluate its current standing before it can improve its TCO. Measuring TCO is a critical step in understanding the business value of IT projects. Bank management can ask some questions to help determine the current TCO status.
* Will purchasing new technology affect the TCO?
* Which best practices will lower the TCO?
* Are there hidden costs involved?
* Are staffing levels appropriate?
* Is the bank making the right investments?
Improving the TCO
Each bank will take a unique approach to improving its TCO. Management can start by setting TCO target goals, and then determining the activities that will produce the greatest results. A TCO project thrives best under the leadership of someone with a technological background who is unafraid of change and innovation. The bank's technology steering committee can become involved, and assist in developing a strong project plan. The networking environment is sure to change during such a project, and everyone in the bank should be prepared for some level of evolution.
SOURCE:
http://www.technologyevaluation.com/research/articles/evaluating-the-total-cost-of-network-ownership-15978/
The lifecycle of a network occurs in five stages:
* Design. The IT department evaluates needs, industry standards, and current technology.
* Acquire. This phase involves acquisition, configuration, and distribution services, as well as asset management.
* Integrate. The system is installed, and the project continually managed. Training and support plans are established.
* Support. Help desk services, maintenance support, and disaster recovery plans are arranged.
* Upgrade. At some point (often too soon), hardware and software becomes outdated, and needs upgrades.
The upfront expenses of a network comprise only 19% of the total cost. The remaining 81% can sneak up on bank management, often unaware of some subtle TCO factors.
Direct, Budgeted Costs
Budgeted costs are usually two-fold. They primarily consist of expenditures directly related to computing, like hardware and software. The second component of direct costs is labor, including Help Desk and technical personnel.
Bank management should budget for costs of all IS professionals directly managing and supporting the network, in addition to outsourced management and maintenance fees. On the support end, costs can be broken into Operations labor, Operations fees, and Help Desk. Operations labor includes management and administrative assistance needed for support. Casual learning and formal training of technical staff are factors, in addition to end-user training performed by the IS staff. There are also cost factors associated with travel and purchasing time.
Networks create and require extensive communications capabilities. These include remote access server fees, WAN costs allocated to the client/server systems, communication lines and device fees, and Internet service provider charges. All of these fees are included in budgeted costs.
Indirect, Unbudgeted Costs
The more elusive figures fall under the unbudgeted category. These include non-productive end-user time, troubleshooting, other IT tasks, and system downtime. Support and training make the system work for users, and the price of those services must be factored into the TCO. Management must calculate peer and self-support from the IS department. There are also costs related to casual learning, CBT, manuals, and online help. End user training can cause downtime and lost productivity.
Unbudgeted expenses often add enormously to the TCO. And, without understanding precisely what the costs arise from, bank management cannot control them. Fortunately, there is a way for Management to keep expenses in check. Knowledge establishes control. Awareness of the root causes for network expenditures gives Management and IT personnel the power to evaluate unacceptable conditions and change them.
10 Ways to Control the TCO
1. Standardize hardware and software purchases. Fewer technology platforms mean lower costs. Defining standards takes only upfront time, with periodic evaluations. As components wear out and become outdated, replace them uniformly across the organization. Upholding policies becomes the test. In the end, the strongest policy will fail without actions to enforce it. Defined standards will help the bank establish training requirements and reduce the costs of hardware upgrades.
2. Inventory all hardware and software. The network administrator needs to know the bank's computing environment for efficient decision-making. The information should be readily available to key people, and easily accessible in each department. The bank can improve its resource management practices by keeping a current catalog of hardware and software.
3. Reduce opportunities for trouble. Implementing explicit policies and profiles helps prevent users from delving into areas better left unexplored, and protects the integrity of the system. High security levels can:
* Prevent users from accidentally deleting critical files
* Keep users out of the Control Panel and the registry
* Keep virus protection software updated
* Keep users from installing unapproved software
* Monitor system activities
4. Implement an efficient Help Desk support system. Users will always need some technical support. Insufficient support is a leading complaint among computer users in banks and elsewhere. An efficient Help Desk will reduce the TCO and frustration at the same time. Some ways to facilitate efficiency are to:
* Implement a single phone number for all end users.
* Have lower-level technicians or a call coordinator answer the Help Desk calls.
* Install Help Desk software. (The benefits of a well-run Help Desk will spread throughout the operation.)
* Track all calls and solutions using specialized software.
* Take action on trouble PCs or end users. o Set minimum SLA levels for technicians.
5. Implement system management technologies. Banks can use technology to help manage technology. Implementing specialized products can help manage a network structure, including remote troubleshooting, application software distribution, and hardware and software inventories (asset management and software version control). Protocol analyzers can be employed to find chatty NICs and busy LAN segments. These watchdog products can isolate problems and inefficiencies early-long before the situation becomes detectable to the bank. This can save the bank enormous costs over the long term.
6. Minimize upgrades. Hardware and software upgrades are expensive. The bank can more cheaply purchase the power it needs upfront. Surprisingly, upgrading hardware and software often costs more than the initial purchase. Another tactic for controlling costs is to maintain software version control, and run only one version of software at a time.
7. Maintain a dependable infrastructure. A strong infrastructure is the foundation for a successful network. A weak structure causes problems that can affect large groups of people-not only individual users. The system should maintain ample bandwidth to key resources for high availability. Software is available to continually update network administrators of strains on the system.
8. Achieve total management support. TCO affects the entire operation, making bank management's support of network decisions critical. Departmental managers need ownership of a piece of TCO. The bank benefits by everyone feeling invested in the system, and taking responsibility for making it work. Since users are an integral part of a network, their buy-in is crucial. Users' enthusiasm about the benefits of network improvements can actually lower the TCO, through less downtime, faster learning, and more peer support.
9. Spread knowledge. The efficiency of the system increases proportionately with the training level of the staff. Users need education to learn how to make the most of the hardware and software that forms the network. Users should be encouraged to understand the network environment, directory structures, printing options, etc. The bank can maintain books, CBTs, and videos for reference and training.
10. Treat TCO as an ongoing issue. Reducing the TCO is not the goal in itself, but rather a catalyst for environmental improvements. As technology develops, the bank must adjust TCO methods to maximize cost reduction. Management can delegate part of the job of continually addressing TCO issues to someone in the bank with the knowledge and resources to curtail problems before they cost the bank money.
What Tools Can Help?
There are many tools that network managers can use to control and manage the TCO. Some specific products are:
# Microsoft Systems Management Server
# Novell Managewise or Z.E.N. Works
# NT Terminal Server/Citrix Metaframe
# Protocol analyzers like Microsoft Network Monitor, Novell Lanalyzer, and Network Associates Sniffer Pro (same product new name)
# Properly updated virus protection software
Evaluating A Bank's Current TCO
Networks around the country run the gamut from virtually worthless to very cost-efficient systems. IT components are continually being purchased and replaced. There is no single panacea for developing a successful network. A bank must evaluate its current standing before it can improve its TCO. Measuring TCO is a critical step in understanding the business value of IT projects. Bank management can ask some questions to help determine the current TCO status.
* Will purchasing new technology affect the TCO?
* Which best practices will lower the TCO?
* Are there hidden costs involved?
* Are staffing levels appropriate?
* Is the bank making the right investments?
Improving the TCO
Each bank will take a unique approach to improving its TCO. Management can start by setting TCO target goals, and then determining the activities that will produce the greatest results. A TCO project thrives best under the leadership of someone with a technological background who is unafraid of change and innovation. The bank's technology steering committee can become involved, and assist in developing a strong project plan. The networking environment is sure to change during such a project, and everyone in the bank should be prepared for some level of evolution.
SOURCE:
http://www.technologyevaluation.com/research/articles/evaluating-the-total-cost-of-network-ownership-15978/
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