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Software Vendor Selection Process

Tips to help short list software vendors

There are currently many hundreds, if not thousands, of vendors for Accounting, CRM, HR and Payroll software. So creating a large list of potential software / vendors should be fairly straightforward. See our page on Where to Find Software Vendors should you need assistance. 

However, reducing this list down to a more manageable 10 – 20 of the most suitable, is more challenging! To help you with this process, we list our top tips.

Focus on your requirements

Particularly focus your on top or key requirements. Study these requirements, so that you know them well. Then check vendor websites to match your requirements to their software available. Do each vendor quickly – you just want to make sure the software meets your needs at a very high level – you can get into more detail later.

Remove any vendor from the list

  • that doesn’t meet your needs
  • that duplicates the software being offered, unless you want to consider different resellers of the same software
  • rebadged or rebranded software, that is basically the same – you really only need one

Look at the vendor’s core software, rather than the add-ons

Focus on the core / base software that vendors offer, rather than with all the add-ons and customisations. If the basic software appears to meet your requirements, good. If it looks like a lot of add-ons will be required, you may want to exclude that vendor and its software.

Scan for software integration or use of third party software

It may be obvious from the vendor website that certain functionality is provided by third party software. Depending upon your view of using third party software and your desire for fully integrated software, include or exclude the vendor and its software accordingly.

Match your technology needs

For example, if you need a SQL solution, there is no point considering anything else. So identify the vendor’s technology solution(s). Strike off any vendor or software from your list that does’nt meet your needs.

You may be flexible on the technology, in order to find the best software solution. But, beware of buying into an older technology with out-dated platforms, operating systems or databases. They may not be supported for much longer and/or you may be forced into a large upgrade sooner than you wished. Likewise, beware of the very new technologies, which have yet to prove themselves.

Check out the vendor track record

Look for vendors with a good track record and/or have customers the same industry as yourself. They are more likely to understand your industry and have experience of it. They may even have specific industry solutions. So check out the vendor case studies and any customer lists they may publish on their website. Flag those vendors that have a good track record or have helped your competitors – they have to be of interest!

Be careful with unknown vendors

Now we are not saying - just stick to the big brands and ignore the unknown software vendors. After all, everyone needs to start somewhere and there may be some very good new offerings. You just need to take extra care and use common sense with unknown vendors.

You won’t necessarily know all the software / vendors at the start of the selection process. But you will learn their names, features and services as you build up your large list of potential solutions.

You need to do your due diligence with each vendor. Strictly, this means reviewing product details, services, testimonials, case studies, company news, financial information, personnel and contact details. And this can take a long time. So short cut this, for the purposes of narrowing the list of potential vendors. You can always do the full due diligence on a reduced number of vendors later on.

Quickly check the vendor website to see that this information is actually available, for later examination. Scan the website for positive information - the more there is, the better.

Similarly, if the vendor website is poor, with limited product, service or contact details – alarm bells should be ringing. Remove it from your list.

Ask the following important questions

There is a limit to how much information can be gathered from vendor websites. At some stage, you will need to contact the vendors. You are likely to have many questions, but three of the most important to ask are:

  • Can their software meet your requirements? (ie in their opinion, is it suitable for your needs and organisation?) If not, remove them from your list. If they only partially meet your requirements, consider whether to include or exclude.
  • Can they meet your time scales? If not, you will have to consider revising your time scales, if you wish to use this vendor.
  • Are they interested in working with you on your project? If not, strike off your list.

Use the Vendor Selection Check Sheet as a template for other things to ask.

Don’t stress about price too much at this stage

Prices and the total cost can change for many reasons. For instance, the vendor may only quote list prices at this stage and may be flexible when negotiating. Your budget may change and you need to consider the total cost of ownership, not just the software costs. And remember, expensive software doesn’t necessarily mean good software and vice versa.

It is too early in the vendor selection process to kick out a potential solution purely because of price. That said, be realistic. If a vendor quotes list prices as $100,000 and you only have a $25,000 budget, then you probably won’t be buying that software. However, if the price gap were smaller, keep it in the list for the time being (it could be worth considering).

Be as objective and impartial as possible

Don’t allow personal preferences, any employee’s previous experience with a system or internal politics to sway your software selection. Stay focused on your organisation’s needs.

Follow the above tips and you’ll save time reducing your large list of software vendors down to a more manageable short list of the most suitable.


For more system selection information visit: Where to find vendors / Vendor selection check sheet / Vendor evaluation questions / Vendor meeting / Software quality checklist

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