Software buyer seeks soul mate (page 2)

-- Logistics Management, 4/1/2005

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Johnny Hodges, an order fulfillment manager with Texas Instruments in Dallas, noted that he looks for a vendor that offers off-the-shelf applications that eliminate the need for customization. "We don't want to do customization," he explained in a telephone interview. "What we've discovered is, when you start customizing, your costs go up."

Hodges' comments notwithstanding, price scored very low as a primary consideration when selecting a software vendor and did not even emerge as a key secondary factor. Only 3 percent of the survey takers named price as their most important consideration, tied with "service and support" and "existing vendor relationships."

Claims Checks

Many survey respondents who are hunting for a software partner are having trouble cutting through vendors' claims to determine the true capabilities of the packages they offer. In response to an open-ended question asking respondents to describe their biggest challenge in dealing with software suppliers, many railed against "false advertising" and unrealistic sales pitches. "Distinguishing between 'realware' and 'vaporware,'" wrote one logistics manager. "Finding a supplier that actually delivers what they promise," wrote an IT director. "Getting the software to do what's advertised," said another. Or as one reader put it, "Every software vendor thinks their software can run every type of business."

Having grown wary of all the hype, logistics managers have learned to check out vendors' claims for themselves. "A lot of times software vendors come in with a sales pitch," said Hodges. "I would caution anybody to filter the sales pitch and ask the right question of the developers to truly identify the capabilities." Another common complaint: "Getting [software suppliers] to understand the unique features of our business," wrote Oleksiuk.

Survey respondents also counseled their peers to take the time to check references. That includes visiting current users to authenticate vendors' claims. "Talk to other organizations that have gone through the process and make sure you don't run into the same bumps in the road they did," suggested Bill Stuebner, director of supply chain process engineering for the WMS Tool Group, an industrial distributor in the Chicago area.

No matter how well buyers do their homework, software purchases still bear a degree of risk. "There's a risk associated with any software you bring in," said Stuebner. "There's no cookie-cutter approach to making sure you made the right decision."

Editor's Note: For more details on how Logistics Management's readers purchase and use supply chain software, look for the follow-up article, "Trading Up," in our May issue.

What's most important in a software vendor?
A survey of Logistics Management readers found that half of software users consider providing the right features for their specific operations' needs to be the most important consideration when selecting a vendor.

Factor	Percentage of respondents
Right features for operation	50
Compatibility with existing software system	17
Configurability	6
Other	4
Existing relationship with vendor	3
Price of software package	3
Service/support	3
Ease of installation	2
Brand name	1
Financial stability of vendor	1
Prior experience with vendor	1
No response	9

Compatibility takes second place
Readers said that their second most important consideration when choosing a software vendor was compatibility with existing software.

Factor	Percentage
Compatibility with existing software system	21
Right features for distribution operations	16
Configurability	12
Price of software package	12
Service/support	12
Ease of installation	8
Financial stability of vendor	3
Brand name	2
Prior experience with vendor	2
Existing relationship with vendor	1
Other	1
No response	10

Where to find software vendors

Need to find out who's selling which software? There are a number of ways to get that information. Here are just some of the information sources available:

Trade shows — The biggest trade show devoted to logistics and supply chain software and technology is the Distribution/Computer Expo, May 17–19 in Chicago. In addition to 200 exhibitors, the event includes conference sessions on everything from software basics to case studies to technical implementation guidelines. For details, go to www.logistar.com. Another logistics technology show is the Gartner IT Expo, which is scheduled for Oct. 16–21 in Orlando (www3.gartner.com). TransComp, held in conjunction with the National Industrial Transportation League's annual convention, will be held Nov. 12–16 in Anaheim, Calif. (www.nitl.org).

Trade publications—Logistics Management magazine (www.logisticsmgmt.com) and other industry magazines often publish case studies of shippers that have used software to improve their operations.

Consultants and systems integrators—These professionals work with shippers in various industries and are well versed in the potential benefits and pitfalls of different vendors' applications. Although most integrators try to be neutral, watch out for possible bias toward a particular vendor with which they have a close relationship.

Recommendations from peers—Network with other members of professional organizations, such as the Council of Supply Chain Professionals and APICS, the Society for Operations Management. Be sure to make site visits whenever possible to see the application in action.

Analysts' reports—A number of industry analysts and consultants evaluate various supply chain software market segments and offer reports on their findings for sale. Some well-known sources include Aberdeen Group (www.aberdeeen.com), AMR

Research (www.amrresearch.com), ARC Advisory Group (www.arcweb.com), Forrester Research (www.forrester.com), and Gartner (www3.gartner.com).

Buyers guides— Industrial Data and Information Inc. (IDII) publishes a guide to warehouse and logistics software (www.idii.com or 918-464-2222). The Distribution/Computer Expo offers an online directory of exhibitors and their products (www.logistar.com).

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