RSR Research: Software Selection – The Last IT Frontier?
Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research’s weekly analysis on emerging issues facing retailers.
It has been a decade since my last CIO assignment, but when RSR partner Brian Kilcourse and I got to talking with one of our vendor clients about software sales processes, it brought back a lot of memories.
Selecting new software applications was never a pretty process. You could be guaranteed that in the first 120 days after implementation of whatever you selected, most every conversation with system users would start with these four words: "In the old system" — followed by a complaint about something we’d left out.
Even in a period when the consumerization of IT is transforming the retail landscape, the issues CIOs face are frighteningly similar to the ones we left behind, with a few twists:
- CIOs often don’t own the budget anymore: many have reported that capital budgets for new systems now live with the Line of Business (LOB) executive. This can make the CIO more a deal-killer than a deal-maker. In other words, the LOB exec may like a particular app, but the CIO can say, "Well, this app will cause me endless integration headaches and an extra [insert the currency of your choice here] to complete." Down goes the deal.
- We have heard anecdotal stories of "procurement types" as gatekeepers. It was bad enough when retailers started using "procurement types" to source merchandise, but to select technology? Seriously? Are any of you really doing this? And, if so, how do you make it work?
- The NRF ARTS committee has created a set of industry-standard RFPs (request for proposals). I have mixed feelings on this one. On the one hand, it’s useful to start from some kind of template when creating an RFP/RFI. On the other hand, one challenge with RFPs is "you don’t know what you don’t know." It doesn’t generate enthusiasm among the users. In fact, it’s painful for everyone involved, from the user to the vendor. Plus, there’s no real way to be sure the thousands of questions in an RFP are answered accurately.
As far as we can tell, one method of system selection remains pretty much intact: a company can hire a company to do the selection for it. This usually involves a lot of interviews, a lot of paperwork (see RFP above), and a lot of money. It’s thorough, but again, the forest may well be lost in the trees.
So now that I’ve basically dissed almost all alternatives, you’re probably asking, "Well, what would you do?" Partner Nikki Baird is really bullish on conference room pilots. Brian and I prefer old-fashioned requirements definition documents (forget yes or no answers, give me words) followed by a conference room pilot. We all like the idea of getting references from similar companies.
Here’s the problem: we can get mobile sites up and running, create a presence on social networks, and brute our way to cross-channel fulfillment, but we are still stuck in the selection model of the 90’s. It seems that software selection is the last frontier of retail IT. It seems more an art form than a science.
Discussion Questions
Discussion Questions: What’s the best way to improve the selection process around software and IT technologies? What do you see as the new hurdles as well as the more traditional ones?
I couldn’t agree more! I too have often used the phrase, “you don’t know what you don’t know” to describe the gap in the traditional process. In addition to Paula’s insights, I would add that given the rapid evolution and dynamics of the technology landscape, it is imperative to not only review a vendor’s historic performance along with the specific ‘feature/function’ test, but determine the vision and the fabric of the company moving forward. Does that company share your vision? Do they, and will they travel with you on your roadmap to success? (I agree with Paula and Brian — business definition documentation followed by the board-room pilot has been the most reliable process for me). These are questions that you simply cannot answer on traditional RFP responses with any credibility.
Given today’s economic environment where uncertainty and fear abound, selections tend to favor large corporations. That old adage, “nobody got fired for buying IBM” seems to be relevant again. I would suggest that smaller companies that can rapidly adjust and track with new technology and the digitally empowered consumer while still maintaining the long-term vision and business objective should be considered.
Software selection is always interesting. Many times in today’s world, it depends on who has the power within the company. When IT understands its role as a service provider to the operations people, the selection process works much better, more efficiently, and the company gets the best tool to deliver ROI. When IT is the power, many times the company gets a product that matches the IT direction but doesn’t give the operations people the best tool for productivity enhancement and efficiency, or customer service.
If the person managing the selection follows the process with the correct decision process matrix, it assures a better selection and on-time-within-budget implementation.
This piece is laugh out loud funny because it’s TRUE. CIOs are now in the awkward position of having to explain to LOB execs that an iPad or other consumer device may not be the best device from which to access an SAP application. I’m putting together a list of very senior executives from across the spectrum in retail because the decision to make a purchase could come from almost anywhere these days.
Here is an approach that I have seen in recent years: assign a mid-level LOB executive to “own” the selection process from end-to-end. This person would take on the role of chairing an internal cross-functional buying team, defining requirements, sourcing vendors, and driving the team to a decision. This person acts as an impartial leader, and should have an intimate understanding of the business process being addressed.
Note that this person is a business/LOB person first, and not someone on loan from the IT organization. This is typically a full-time role, and the team leader is relieved of their prior responsibilities in order to focus on this important task.
This approach assumes the right person is available and the company is willing to fund this temporary, yet full time role. Having seen a dozen approaches for vendor selection over the years, I’d guide any company looking to make a large-scale software selection to embrace this model.