I have been asked the question, and I have heard others in the TMG Consulting team being asked the question: “What do you feel is the most important task or activity in the selection of a new customer system solution?” The answers have varied a little depending on the individuals' past experiences and their interpretation of the word “important.” But, many times the answer that is returned is that the most important work comes after you have made a selection. This is the when you have to devote an extensive amount of time and effort in additional or enhanced due diligence to ensure that the solution is the best choice for your company. At TMG Consulting, we utilize two distinct processes or methodologies to analyze the solution scope and confirm the solution decision. And, most of this is accomplished before we begin contract negotiations.

We have probably all experienced “buyer's remorse” of some form or another after we have purchased something like a car or a piece of electronics. We hurry home and then start to research the item to ensure that we got a good deal. Or, we talk to friends hoping that they will confirm that we have made a good decision. Fortunately, this should never be necessary with a customer solution purchase. Allow yourself time to really get to know the vendor and the product. Don't let the vendor push you to sign the contract until you have completed your investigation. The reputable vendors won't push you too hard anyway, as they are equally interested in ensuring that there is a good fit between the product and your needs.

To accomplish this extensive analysis, make sure that you have a plan. Do not invest your precious time in activities that will not result in additional knowledge about the product and the vendor. Or, worse yet, do not go down paths where the results are geared to simply validate your decision. If you have been open and attentive up to this point, listening to the vendor and observing the product in a scripted environment, you should have picked up on things that needed to be checked out. Since you have chosen and notified your vendor business finalist, the vendor and its partners should be very open to sharing what might otherwise be considered confidential material. The vendor(s) may want you to sign non-disclosure documents, but that should be acceptable at this point. If you have concerns about a private corporation's financial stability, demand to see their financial reports. If the vendor says that it does not have financial reports, that should be another red flag. Determine how much of the vendor's income is being put back into research and development. Ask to see the solution's database layouts, the system documentation, etc. Conduct a detailed review of the product, becoming fully aware of the probable gaps, the areas where your business processes might have to change, the areas of interaction between other systems, etc. Pull in your technical experts and your functional subject matter experts, and let them know that no question is out-of-bounds.

The Solution Scope, Solution Confirmation and the final phase, the Installation Plan, are as shown in the diagram below:

We have seen two ways to go through these Solution Scope analyses and Solution Confirmation phases, both with the same intent—to ensure that the correct decision has been made. The first way is for the utility to select two business finalists, and take both vendor/solutions through these continuing due diligence phases. While this many times could result in double the work for the selection team, it does force the selection team to proceed with similar steps and analyses of both vendors. It may also result in more favorable treatment in terms of contractual conditions and pricing as the competition between the two finalists continues through the submission of the best and final offers and the subsequent execution of the contract. The second way to proceed through these continuing due diligence phases is for the utility to keep the procurement process “open” until the contract is signed, thereby allowing the utility the option of proceeding with the second-choice solution should something adverse be discovered about the original vendor of choice through the Solution Scope or the Solution Confirmation phase of the project.

Several years ago I worked with a utility that chose the first option. It chose to take its two finalists through all the steps of the scope analysis and confirmation phases. During those activities it found significant gaps between its business processes and the functionality of its number-one vendor's solution. Those gaps would not have been identified without the utility's very concentrated review of the solution (an activity that the vendor incorporated into its implementation plan but wouldn't have been conducted until after the contract was signed). Having its second choice vendor still on board and already into the Scope Analysis and Solution Confirmation processes allowed the utility to move forward at a much faster pace.

I have also worked with utilities that chose to proceed with their single finalist, but left the procurement process open. In one case, the utility discovered, through those detailed processes, some significant technical concerns with its first-choice solution. When the utility was unable to rectify those concerns with the vendor, the utility rejected that solution and moved its second choice solution through an identical process. I have also been involved in projects where the utility and the vendor were unable to agree on contract terms. In those situations where the procurement was not closed, the utility was then able to bring their second choice vendor into the Scope Analysis and Solution Confirmation phases of the project.

The final step in the selection effort is the phase that we call “Installation Blueprint. It includes the development of the scope of work, the contract negotiations and the documentation of what is expected, what was promised and how you will get there. Do not assume that the scope of work and the work plan that is prepared and submitted by the vendor are the best for you. And don't let your attorneys be the ones who are the most knowledgeable about the contracts and attachments. By their very nature, contacts are initially very one-sided, designed to protect and enhance the interests of the party which prepared them. In both the scope of work and the contract documents, be sure to incorporate best practices from the projects and contracts of your sister utilities, especially those that have chosen the same solution. Make sure that the terms and conditions are fair and equitable for both parties. And, don't try to take advantage of your vendor. This project has to be of value and a good experience for them. Remember, you are in this for the long haul.

These phases of the selection effort are the most tedious, time-consuming and, frankly, the most boring of what is otherwise an exciting and rewarding opportunity for utility customer solution selection teams. But, these additional phases, after the choice has been made, are essential elements of the selection effort. After you have selected your solution, don't let down your guard. Continue on being a “doubting Thomas,” with a “show me” attitude. Challenge your vendor business finalist and see if it can come through. If the vendor and its solution can't produce now, do you really want to spend the future in a partnership with them, or worse yet, end up with a failed customer solution implementation?

Gary Weseloh is a Vice President of Five Point Partners with over 30 years of experience with CIS solutions for the utility industry. He has over 30 years of utility experience, including the management of customer systems (CIS, meter reading, remittance processing, complex billing) at a large combination utility, consulting on mobile computing/field work automation, and extensive selection, evaluation and installation oversight projects.