SOFTWARE PROJECT MANAGEMENT—GENERAL LEDGER PRODUCT SELECTION

Part 2 Getting to a Signed Contract

In Part 1 of this two-part series we broke down the process of selecting general ledger software into five stages.

Stage 1: Explore feasibility
Stage 2: Develop the project framework
Stage 3: Product demonstrations
Stage 4: Product evaluation and selection
Stage 5: Negotiate purchase

We covered Stage 1 and Stage 2 in Part 1. We will look at Stages 3, 4, and 5 now.

In Part 1 we introduced these principles of software project management.
#1 For the CFO, managing the project must be hands-on.
#2 Success of the project depends on a collaborative, team approach.
#3 Successful software implementation is almost always more difficult than you expect, and as the complexity increases, so does the risk of failure.

These principles hold through all stages of any software project.

Stage 3: Product Demonstrations

In Stage 1 you identified products on the market that purport to meet your needs, and in Stage 2 you and your team set a project timeframe and developed a list of criteria for selection.

Now it is time to see how your criteria match the capabilities of the software products, and in the process, find out how your organization can make the best use of a software upgrade.

As you establish relationships with the vendors, it is to your advantage to present yourself from the get-go as knowledgeable, confident, and in charge. The reps make their living selling their products and will usually do their best to influence your decision. You have to rely on their expertise, so your goal is to forge a strong relationship based on mutual respect and trust. But always remember that you drive the process and you will decide the features that will and will not be included, how the demos will be carried out, and how implementation will happen.

Over the years I have learned to assertively demand that the sales rep tailor the demo process to my needs. Yes, we need to respect the rep’s time, but we also need to stick to our resolve to review the product with great care before committing to it.

To make sure that enough time is allotted for a complete demo, you might request breaking it up into two or three sessions so that team members don’t get overwhelmed. If you think it necessary, ask for a second or third look at certain features. As you get closer to a decision you might ask for personalized demos—say, the accounts receivable and payable staff can get one-on-one interactive sessions (with you present, per Principle #1), or you can get a close look at how reports are built, or how cost allocations are performed. If the software is complex, the learning curve to get started is probably too steep, but otherwise, you might request a download of a trial copy to play with.

You can further improve the chances of a successful demo by communicating in detail the criteria for product selection that you and the team have identified. This is a valuable exercise for a few reasons: By explaining your expectations you can confirm that there is a potential fit here. A customized demo which you participate in designing will get you to a decision efficiently. And, this is a good opportunity to find out if you and the rep can collaborate as partners.

For examples of issues you might discuss, let’s recall the areas that we went over in Part 1.

Must-have basic functions: In addition to the most basic elements, make sure you can distribute expenses and revenues to cost centers at the transaction level. Make sure you can import budget data into the software. If you need to track 1099 data and generate the tax forms, verify that the software can do this. You could also include here a question about downloading cleared check and deposit data from the bank for the monthly reconciliation.

User interface: If this is an important criterion you can ask the rep to show the team step-by-step how basic operations, such as recording an invoice, paying an invoice, and writing a check are done. Is there flexibility in how transactions can be entered? Can transactions be scheduled?

Feature upgrades: Let the vendor know of any new features that you are considering, such as purchase orders, grant-tracking, or budgeting. If the rep appears to have their own plans for what they want to show you, this is a good time to specify the features that you are sure you do not need to spend time on.

Reporting: You’ll want to see the range of reports that are pre-written, as well as to understand the capability for building custom reports. Will users at all levels be able to build reports? Will superusers have to get special training to build them, or will you have to pay the vendor to create special reports? How does drill-down work?

User-defined fields: How many are available? What is the process for activating and using them? Can additional fields be added?

Cost allocations: How are direct costs distributed to cost centers at the time that transactions are processed? How are indirect costs such as management and general, occupancy, or program administration allocated? Can recurring allocation entries be created?

Integration with other programs: If your team has determined that the new software must integrate with one or more other programs, this area will have to be a major focus of the demos. If you do not foresee a need for integration make sure the rep does not waste time promoting it.

Stage 4: Product Evaluation and Selection

Evaluation

Evaluating the products is a team activity, for sure. Ideally, every team member will attend every demo and you will have written criteria (developed during Stage 2) to measure the success of each product. Discuss reactions after every demo. Encourage feedback so that you can get a sense of where the hesitation and where the enthusiasm lie. Take everyone’s concerns seriously. Make a list of questions to go back to the rep with; do this as many times as necessary to identify the concerns that can be mitigated and those that are deal-killers.

Selection: contacting supplied references

Final responsibility for selection lies with you, the PM. You will have your own set of criteria, relating perhaps to cost, technical support, reputation of the company, or concerns expressed by your IT department such as data security.

At this stage you should be testing your confidence in the company and its product. If you and the team like it and want to buy it based on the demos, you are at risk for making a hasty decision. Now is the time to step back and find out how users who are very familiar with the product feel about it.

Contacting references: The vendor rep should be able to give you contacts—most likely the CFOs—at a couple of organizations that are similar to yours in size and mission.

When speaking with the reference you’ll want to know if they use the software to run mission-driven programs similar to yours. Rather than go too far into the weeds, you may have to stick with general questions such as my suggestions below. You are trying to get beyond the sales rep’s pitch and find out if the software company is committed to providing a quality product with quality support in the long run.

Here are some questions to explore with the reference.

  • Is the software user-friendly?
  • How did the implementation phase go?
  • How was the training?
  • Has it been challenging to work with the company to get the reports that you need?
  • How is the customer service?
    • What is help desk turnaround time?
    • Is the help desk competent?
    • What is the cost of technical support?
  • What were their hidden costs?
  • What have the challenges been?
  • Is the company supportive after the implementation is complete and paid for?
  • Did you integrate the software with existing systems such as fundraising or billing and how difficult was that?

Hopefully, your references will express overall satisfaction with the software but will also tell you candidly about challenges they have encountered—there are bound to be some. Time, now, to go back to the rep to bring up any weaknesses you have discovered and find out if you can live with them or fix them.

Selection: getting to know the company

Assuming that you are moving forward with this company, you will want to know more about it. Questions fall into a few categories.

1) Strength of the company: Every time we purchase a piece of software we put our faith in the longevity of the company and their commitment to supporting this product. No one can predict the future but you may be able to get a sense of the company’s stability. How long has it been in business? How many nonprofit clients does it serve? Are they adding new clients every year? How long has the sales rep been with the company? How often do they do upgrades? Do they have certifications showing that they adhere to certain industry-wide standards?

2) Security and infrastructure: You and your IT department will ask question such as: What are the technical system requirements, including hardware and software? How will your data be backed up and protected? If it is a cloud-based system: Where are the files stored and what are the company’s contingency plans if a catastrophic event should occur? How do they protect against cyberattacks? What is the track record for system failures causing downtime?

3) Ongoing services: How well will they serve you after you are up and running and they have earned their fees? Do they offer, on an ongoing basis, customization, on-site training, and/or consultation? Is there a help desk and how does it work?

Stage 5: Negotiation

Negotiating a purchase agreement may be simple and straightforward or challenging, depending mostly on the complexity of the software. Even after you have made your selection there are a number of things still to be worked out, mostly relating to implementation.

Implementation Questions

Will you be provided with a dedicated implementation specialist who will guide you through the process and be available to answer all of your questions? (This is a great thing if you can get it.)

Data migration: Who will be responsible for migrating customers, vendors, and transaction data if necessary? What format should be used for data files?

Recalling Principle #3, here is a suggestion: Limit migration of transaction data to just what you need. You may like the idea of bringing in earlier periods, but I have found that this can turn into a nightmare, resulting in unanticipated costs and project delays. As time has a tendency to fly, you will accumulate a couple of years of new history before you know it and probably find that you can do without the old data.

Training: How will it be done? Remote group sessions? Hands-on remote group sessions with each user at a computer? Remote individual training? In-person training? Will the users have a resource to call with questions? Is there a written training manual? How is pricing for training calculated?

Technical Support: Ongoing technical support may also come in different flavors. Aim for support that includes 24-hour turnaround on issues, with access to knowledgeable technicians that will provide one-on-one help.

Additional services post-implementation: Are future consulting and customization services available? How would you be charged for additional training beyond the contracted amount?

The contract

Are you ready to negotiate a contract? There probably won’t be much room for negotiating on purchase fees and/or licensing fees, but costs of implementation, training, extra services, and ongoing technical support often vary. You may be able to find provisions that can be negotiated. I highly recommend including a provision for holding back final payment until you are satisfied that all of the agreed-upon work has been completed.

Once all of the parameters in the contract are defined take your time to understand exactly what you are agreeing to. Ask picky questions to signal to the rep that you are examining every word.

In Sum

Software solves problems, for sure. It is the stuff that brings the finance department together to get the work done. But projects can go south for an infinite number of reasons. As the project manager, the CFO seeks to control all of the variables, but that is not always possible. Investing ample time and sticking to basic principles will get you within reach of a successful result. I have given you the principles that were forged from my experiences. You will discover your own principles as you enter the arena and face down the challenges unique to your projects.