Ten Steps to Software Selection Success or RFPs Should Have Died with DOS

A Better Approach: The 10-Step Software Selection Process

Instead of relying on RFPs, consider this more effective 10-step process that focuses on transparency, meaningful engagement, and finding the right implementation partner.

1. Build a Blueprint of Your Envisioned Solution

Before approaching any vendor, clearly define what success looks like for your organization. This foundational step involves three key phases:

• Discovery: Conduct leadership interviews to understand your organization's vision and document current progress toward objectives
• Diagnosis: Observe your organization's processes to identify gaps, bottlenecks, and inefficiencies while ensuring staff needs align with management objectives
• Design: Create an optimal solution that may include system automation, personnel realignment, and process modifications to achieve the best cost-benefit ratio with minimal risk

Many organizations engage external consultants for this critical first step, while some vendor candidates may assist with parts of this process using your existing documentation.

2. Summarize Your Company Demographics

Provide potential vendors with basic information about your organization to help them determine if you're in their target market. This transparency benefits both parties—vendors will self-eliminate if you're not a good fit for their solutions.

Include the following in your demographic summary:

• A brief description of your company
• Employee count
• Annual revenue
• Number and location of offices
• Anticipated growth plans
• Current software solutions (both local and cloud-based)
• Software that will remain after the new implementation

3. Define Your "Red Lights"

Identify the absolute must-have requirements for your new software solution. This challenging but crucial step involves gathering input from all departments about their top five non-negotiable needs.

Focus on factual, specific requirements rather than subjective criteria like "user-friendly" or "scalable." These more qualitative aspects can be evaluated later in the process.

Examples of good "Red Light" requirements include:

• Specific functionality requirements (e.g., Quality Control modules, Payroll Garnishment handling)
• Technical requirements (e.g., API availability for integrations)
• Implementation requirements (e.g., on-site vendor presence during testing and go-live)
• Vendor qualifications (e.g., minimum number of industry references)
• Operational necessities (e.g., customer portals for order status tracking, multi-level approval workflows)

Narrow your list to 10-15 true deal-breakers that will be included in your Intent to Purchase Letter. Reserve the remaining requirements for your evaluation scorecard.

4. Issue an Intent to Purchase Letter

Rather than a traditional RFP, create an Intent to Purchase Letter that sets the stage for open dialogue with potential vendors. This document should include:

• A brief description of the software you're seeking
• The business issues you're trying to resolve
• Your company demographics
• Your non-negotiable "Red Light" requirements
• An outline of your selection process
• Your timeline
• Your anticipated project start date

Importantly, ask vendors to respond via email with their intent to participate or any questions, rather than completing a formal document. This approach encourages open communication and gives vendors access to appropriate team members for clarification.

5. Build Your Scorecard

Develop a comprehensive evaluation scorecard that your team will use to assess each vendor's solution. Unlike traditional RFPs where vendors self-score, your team will evaluate how well each solution meets your specific needs.

Each department should create a focused list of 10-15 evaluation criteria, starting with their "Red Light" requirements. Compile these into a single document, highlighting the critical requirements from your Intent to Purchase Letter.

6. Interview "Green Light" Vendors Only

Once vendors respond to your Intent to Purchase Letter, eliminate those that don't meet your non-negotiable requirements. Then begin interviewing the remaining candidates.

These interviews are crucial for assessing not just the software's capabilities but also the implementation team's understanding of both their product and your business. Be wary of vendors who want to showcase their software without first understanding your needs through staff interviews.

A quality vendor will want to interview stakeholders from all functional areas. These conversations provide valuable insights into both the software's capabilities and the consultant's expertise. Your team should update their scorecards during these interviews.

Request that each vendor provide a summary of their findings and a cost-benefit analysis after the interview process.

7. Conduct a Second Elimination Round

After completing vendor interviews, reconvene your team to determine which candidates should advance to the demonstration phase. Ideally, limit this to two vendors (three at most).

This narrowing is practical because, within similar market segments, the functional differences between software solutions are often minimal. Focusing on fewer vendors allows for more thorough evaluation.

8. Control the Demo Process

Take charge of the software demonstrations to ensure they address your specific requirements. Provide vendors with a structured outline or script based on your evaluation scorecard. This approach helps:

• Keep presentations focused on your priorities
• Enable fair comparisons between products
• Allow your team to complete their evaluation scorecards

Include time for vendors to highlight what they consider unique about their solution. This "sizzle" portion can reveal innovative approaches to challenges you hadn't previously considered.

9. Make Your Vendor Selection

After demonstrations, request references from your final candidates. Most vendors wait until this stage to share client references out of courtesy to their existing customers.

When reviewing vendor proposals, be prepared for differences in pricing models and structures. Consider evaluating the total cost over a seven-year period (the typical minimum software lifespan) to compare subscription-based and perpetual license models effectively.

Look for fixed-fee proposals with clearly defined scopes, and be cautious of any proposal containing "estimated" service fees.

10. Consider a Conference Room Pilot

For organizations with unique processes that may require customization, consider conducting a "Conference Room Pilot" or proof of concept with your selected vendor.

This paid engagement (typically 10-20% of the total project investment) models key business processes to ensure everyone understands how the implementation will work in your specific environment. While representing an additional investment, it can pay for itself through better software fit, a more invested internal team, and a stronger relationship with your implementation partner.

Project Initiation: The Real Work Begins

Once you've selected your software and implementation partner, the real work begins. While the implementation journey may have challenges, your chosen vendor should now be a trusted partner guiding you through the process.

By following this 10-step process, your organization will be well-positioned to realize the benefits identified during your evaluation and achieve the return on investment your management team expects.

Final Thoughts

The traditional RFP process for software selection has outlived its usefulness in today's business environment. By adopting this more transparent, engagement-focused approach, you'll not only select better-fitting software but also build stronger relationships with your implementation partners.

Remember that software is ultimately just a tool. Its value comes from how well it addresses your specific business needs and how effectively your team can leverage it with the support of knowledgeable implementation partners.