By Dick Kuiper

Small companies are the Rodney Dangerfields of the software selection process — they can't get any respect. When large companies may be making a $200,000+ investment in the software, there is no end to what vendors will do to be chosen; they have a sunk cost, so to them it's all margin and they'll spend handsomely to get the sale (there is enough margin to afford the highly competitive efforts of a number of vendors). For small companies, however, the situation is not so rosy.

So, you're a small company! You want to do a detailed specification because you've heard it increases the likelihood of a successful implementation. You want to scan the full range of vendors and query them about their capabilities at the same level of detail as your specification. You want the vendors to come in and give you a full-day, company-tailored dog and pony show because you think it's worth your time. You want the vendor to take you to supper. You want to play the finalists against each other. You want to pay less than $75,000 for the software.

There are some contradictions here. For you this is a big, complex decision, fraught with risk. To the small market vendor, it's a commodity sale with thin margins. They will send you information, demo diskettes, brochures and the like, but they're not going to spend any time on you until you're down to the last two or three choices (a cut made without the benefit of a demonstration). The dog and pony will be a canned show, done quickly, maybe by phone line, showing easy functionality and the glitzy bells and whistles — you will not have a great deal of time to test the whats and hows of the package. They won't spend a lot of time haggling, and the vendor won't guarantee the work by his representatives and/or affiliates.

It sounds like a lose-lose situation for you, but it doesn't have to be. A strategy that works is as follows:

•Develop a detailed functional specification. It is important to define what your system should do.

•Use a source to identify potential vendors based on arbitrary criteria such as platform, functional modules, markets served.

•Prepare a one or two-page fax with a brief description of your company and industry, any special operating considerations, the functional modules you're looking for and the approximate price range. State that they should respond if, and only if, they or one of their affiliates believes they are a good fit. Only vendors wanting your business (a good first qualification) will respond, and follow up with various product information.

•Select no more than 50 key items from your detailed requirements list, then review the product literature and compare, to the best of your ability, their capabilities to your needs.

•Select the top three vendors, and call them to discuss briefly the key items you could not answer from their literature. As one vendor falls off, bring the next one up the list until you have three qualified vendors.

•Tell the vendor they are one of three systems being evaluated and schedule a half-day demonstration with two hours for their presentation, then two hours to deal with your functionality questions.

Once you have taken these steps, select the winner and perform a due diligence on the company as you would any other important vendor. Check at least five references (you can get more references from the references given you by the vendor). Taking these steps can assure some degree of confidence in your eventual selection.

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