Whether your company is in need of a commercially packaged warehouse management system, point of 
sales system, inventory control system, direct-to-customer order management system --or some combination of the aforementioned, the selection of the right system is a major undertaking for your business. No matter what type of new system you’re considering, that purchase is going to be a long-term investment. It has significant ramifications for how you serve your customers, the productivity of your personnel, and the management information it can provide to help you manage and grow your business.
To make an accurate system assessment and choose the right system for your company’s needs, we recommend you follow a four-step selection plan. This plan includes:
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Organizing the project;
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Defining your business needs;
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Gaining a complete understanding of the vendor’s systems and capabilities; and
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Examining the expected ROI of the system.
By following these four steps, you can be assured of making a sound system selection decision for your business. For ease of discussion, we are going to focus on selecting an order management system, but again you can apply this to any system you are looking to select. We have broken these steps into 2 separate posts in order to easily read and digest.
Step 1: Organize the Project Internally
Before you start your system search, get the project organized within your company. For starters, you may want to appoint a management sponsor—someone in top management, such as a vice president of operations, who will represent the interests of the system’s users. This will help elevate the project in terms of perceived importance, and encourage middle management and user departments to participate in the selection process.
It’s also the time to set up a project steering committee, comprised of representatives from all areas that will be affected by the new system. Early on, the steering committee will identify the business functions to be accomplished by the new system. To assist the steering committee, management should provide the company’s growth plans (three to five years) and any other anticipated changes in the business’s direction. These include other sales channels, additional websites, additional warehouses, changes in merchandise mix, etc. To further guide the selection process, management should also provide budget guidelines and decide whether the new system should run on existing hardware.
The steering committee should draw up a written plan for evaluating and selecting a vendor, and implementing the order management system. The steering committee should then meet bi-weekly initially then move to weekly meetings as the project progresses. These steering committee meetings will focus on the progress of the plan and any issues or delays that may have occurred. A project coordinator/manager can help keep the project on schedule and within budget.
Step 2: Define Your Requirements
Deciding what system functions you need can be challenging. But keep in mind that this is critical in order to pick the right “match” for your requirements. From our experience, the most effective systems generally have a 70 to 80-percent fit with your requirements before modification. More extensive customizations lead to rewriting the order management system, which is generally expensive, risky, and delays the implementation of the system. It’s a good idea to prioritize your functional requirements and divide them by each subsystem (e.g., order-entry, inventory or marketing). Include any unique requirements, key data elements missing from the current system, major screens and reports, and/or data interfaces to other systems.
Here’s where a decision matrix approach can help. A decision matrix can be useful to evaluate a system’s specific functions that you are requiring. It’s a handy way to make quick comparisons between order management system vendors. Click to view a snap shot of an actual decision matrix that we developed for a client during a system selection project.
Read Steps 3 and 4 in selecting an OMS.
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