The Slippery Slope of Software Services (Part 1)

Don’t let your project budget get blasted by services

Whether you are selecting new software, or implementing an application upgrade, your success depends heavily on whether you implement the software on time and on budget. You may be tempted to rely on your vendor’s experience to perform certain implementation tasks for you – hoping to save time and money. However, when you start using vendor services to accomplish tasks you either should do yourself or shouldn’t do at all, you start down a slippery slope of service expenses that will ruin your project budget and timeframe. Two examples illustrate this point:

  • Data conversion should NOT be left to the vendor

    It’s easy to fall into the trap that your vendor should convert all of the data from your existing system into your new system. After all, who knows the new system better than the vendor? However, consider that you need to know how the new system works for your organization as well as the vendor does (or it won’t work!). Further, you already know how your current system works – or, more importantly, how your organization uses it.

    If you pay your vendor to perform the data conversion, you will spend a lot of time teaching your vendor’s consultants how you use your current system (and what the data means), and more time teaching them how you intend to use their system (and what you expect the data to mean). Then they’ll do the easy part and map the data from one file to another – a process you can frequently get accomplished with a smart user and a spreadsheet – and charge premium rates for programming talent. The next time you see a proposal including data conversion services, ask yourself what you’re really getting, and whether it’s worth the money.

  • The software should NOT be customized to meet every user demand

    Customizing your applications to meet every user demand is the surest way to ensure your project misses deadlines and goes over budget. All user demands are not equal, and demands for new or modified functionality must be carefully vetted by your management before any consulting work begins. Vendors are usually happy to offer additional consulting services to address each and every user demand, destroying your project budgets and timelines. Cost overruns from this problem can run into millions of dollars.

    Instead, each demand should be assessed for what value it delivers the organization and what consulting costs will be incurred (both initially and in the future). Well-run projects will review all user change requests through the project team to quantify value, costs, and any alternatives (your vendor should be able to help you determine what alternatives there are). The project team will then submit the requests with the highest return-on-investment to a senior executive or steering committee for review and approval. Only with careful management of user requests can you stay away from the slippery service slope and make certain your implementation project stays on target.

Vendors eager to make money on services will propose ‘comprehensive’ data conversion projects and ‘effective’ change control procedures that do nothing but take the control of project – and your project budget – out of your hands, and offer little quantifiable value in return. The savvy software buyer will pay attention to these issues both before and after they buy a software application.

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