Everyone has a war story regarding a past experience with a billing or customer system implementation effort. Like major surgery, it is not a pleasant process or one that anyone wants to repeat. There is no doubt about it - acquiring any type of software product is risky business, let alone a customer information system (CIS) which has a significant impact across the entire organization.

However, one way to minimize the risk of a convoluted or failed CIS installation is to engage in a comprehensive product evaluation and selection effort. This article offers a few guidelines and a general process for selecting a CIS product solution.

Preparation
It is amazing how many organizations start the process by developing a Request for Proposal (RFP) without giving much thought to what it is they are looking for. The preparation process should focus on: understanding and documenting the organization’s current business and technology environments; identifying the organization’s strategies for serving its customer; identifying the organization’s target business and technology environments; defining the project scope for the initial CIS “Go Live”; identifying the functional requirements, and developing an idea of how much the organization can spend to procure and operate the new CIS. Frequently, this information is bundled into a project deliverable called a Customer System Design Blueprint.
Sound like a lot of work? It can be. However, in today’s fast paced business environment, an organization cannot afford to dedicate resources and spend months developing this blueprint for success. Instead, the organization should take advantage of focus groups and employ structured sessions to quickly identify and document various components of the design blueprint. This streamlined process usually results in a checkpoint with management focusing on confirmation of key strategies, organizational direction, and potential cost of the new CIS.

Historically, the project team has been asked to answer the age-old question, “Do we really need to do this?” This usually translates into identification and assessment of alternatives and the development of a detailed cost/benefit analysis. Today, organizations are quickly moving past this question without engaging in extensive alternative analysis or cost/benefit. Why? The extensive emphasis on customer service and the quick time to market for new products and services render current systems with their long lead times and high modification costs woefully inadequate. In addition, typical cost/benefit analysis fails to empirically quantify the true benefit of improved customer service and quick time to market. Organizations view the new CIS as a strategic initiative, which is imperative to future success, and are quickly moving past the alternative and cost/benefit analysis to replace existing systems with a CIS vendor product solution.

Procurement
Once the Customer System Design Blueprint is completed, the organization is ready to develop the Request for Proposal (RFP). It is a straightforward process that utilizes information from the blueprint to provide the vendor with information regarding the organization, the current and target environments, and the scope of work. To complete the request, a section should be added with instructions on how the vendor should structure the response, any terms and conditions, procurement forms and pricing sheets to allow for a structured comparison of proposal pricing.
We recommend keeping the RFP as simple and concise as possible. Limit the RFP to no more than 50 pages and make questions clear and straightforward. Given the extremely busy marketplace, vendors are focusing their resources and sometimes set aside and not respond to densely worded lengthy RFPs. In addition, if you have developed a comprehensive requirements checklist, we suggest that it not be issued with the RFP but rather extended only to qualified vendors who enter the procurement process through the submission of a proposal.

We do not recommend pre-qualification of the vendors who will receive the RFP. There are approximately 90 vendors offering CIS product solutions to the utility marketplace and pre-qualification of vendors can be a tedious process. In addition, if your organization is a public utility, it is illegal to exclude a vendor from participating. We suggest identifying minimum requirements in the RFP and letting the vendors determine if they will or will not respond. For example, if you require the solution to operate on a UNIX platform, specify this in the RFP as a minimum requirement that the vendor must meet for further consideration. There are many resources available which identify CIS product offerings. One such resource can be found on the Internet at www.cisworld.com.

Now that your RFP is on the street, we suggest you actively promote it and make yourself readily available to answer questions.

Evaluation
The good news is that you did a great job of promoting your RFP and received a dozen proposals. The bad news is that the project team is feeling overwhelmed by the number of proposals and the sheer volume of information. We suggest the following process.

Review the proposals to determine which ones meet your minimum requirements. Our experience finds that if 12 proposals are received, as few as four and as many as eight will be eliminated by applying the minimum requirements. The surviving vendors become your business finalists.
At this point, the business finalists are required to complete your comprehensive requirements checklist, and they must conduct an outlined one-day product demo. Meanwhile, the project team will conduct telephone reference checks and will construct a scoring sheet to evaluate vendor proposals based upon defined evaluation criteria.

At the end of this process the project team will meet and agree on a single or at most two vendor finalist(s). This evaluation utilizes project demonstration scores, functional checklist scores, telephone reference checks, and proposal evaluation scores to determine the finalist.
Although a single finalist is being selected, the procurement should remain open. This will allow the second place vendor to join the process if confirmation activities fail with the identified vendor finalist.

Confirmation
In the past, more time was spent on evaluating vendors than working with the vendor finalist to confirm the product and minimize solution risk. As a result, contracts were signed based upon the vendor’s initial proposal.

This phase of the project is the most important. It allows the project team to more fully exercise the product by conducting a detailed product walkthrough. This walkthrough can be driven by the detailed requirements checklist which focuses on product functions or through the use of business scripts which focus on the organization’s business workflow. In any event, the result is an identification of product modifications, interfaces, and data to be converted. The vendor is then asked to provide pricing for each modification, interface, and file conversion. Based on this information, the project team can make an informed decision on those items to be considered in scope. We recommend pursuing only those modifications that are required to meet regulatory requirements, rates, and rules of service. The idea is to move quickly onto the new system, use it for awhile, and then modify it as required.

In addition to the detailed product walkthrough, organizations may require hands-on use of the product. This can occur in varying degrees and is usually negotiated with the product vendor. It can take the form of a full blown on-site usability lab or an extra day or two of product review time.

The project team and the vendor will work together to clarify proposal points, conduct site walkthroughs, review conversion file layouts, or any other activity required to obtain a firm grasp of the effort’s order of magnitude. Based on this additional information, the vendor will submit a best and final offer, which further specifies costs provided in the original proposal.

The organization is encouraged to visit the vendor’s corporate office and at least one customer site. During the corporate office visit, the intent in part, is to meet executive personnel and set the stage for contract discussions and negotiations. It also allows the project team to meet application development and support personnel and review help desk facilities.

The customer site visit will be used to clarify outstanding product design points and answer questions regarding product workflow which may have arisen during the detailed product review or usability lab.

Contract terms and conditions, payments schedules, warranties, acceptance, exit strategies, etc., must be discussed and negotiated with the vendor. Needless to say, extensive legal review of vendor contracts is required. We recommend that attachments should fully delineate the project scope of work, responsibilities, deliverables, timeline, and disbursement schedule.
The information from this confirmation phase is consolidated into a Project Business Plan.

Approval
Gaining approval by organizational executives begins in the preparation phase with the presentation of the Customer System Design Blueprint. Additional presentations should be made to executives throughout the entire selection process. Without step by step communication with the executives, final approval can be a long and tedious process. The Project Business Plan will provide the information for executive presentation materials.
To ensure the best presentation, verify that all details have been completed and necessary reviews and approvals have been received prior to executive approval. This approval process can be as short as 2 weeks or as long as several months.

Once the solution is approved, the procurement can be closed and the product evaluation and selection process terminated.

Summary
Once the final approval is achieved and the contracts are signed, the work is just beginning. Regardless of the planning efforts, CIS implementation is an arduous and risky effort. However, implementation risk has been minimized by engaging in a thorough evaluation and confirmation process which has resulted in: a thorough product understanding; a comprehensive definition of project scope and associated cost; a clearly defined project plan and commitment of resources; and a well defined, fair and reasonable contract.

Greg Galluzzi is the President and Senior Consultant with TMG Consulting based in Austin, Texas. Greg has 25 years of information technology and consulting experience across 300 CIS projects. Greg can be reached at gregg@tmgconsutling.com.