Preliminary Needs Definition

Introduction

All of the products on the market today have achieved commercial success. They work for many people. The only problem is that some may not work for you. Your objective must be to find that one product that meets your needs, and with which you can form an effective and efficient partnership.

The process of selecting a new accounting or ERP system isn’t just about software. It’s about creating a stronger foundation for success that forces you to look inward, and create a process that takes into consideration all of the factors that contribute to your success as a unique business entity. The following list may serve as our outline for these discussions.

• Build a sense of teamwork by giving each person, not just the right to participate, but the right to be heard and taken seriously.
• Begin to build a consensus of what needs to be done by holding open-ended meetings with all groups that will eventually participate.
• Start collecting improvement / requirements information from individuals and workgroups.
• Identify the most important factors affecting your success as a unique business, whether they have anything to do with the accounting system or not.
• Determine what your customers want.
• Critique current system (software and business processes).
• Determine if specific business processes will require substantial improvement.
• Build a picture of the most important functional requirements.
• Build a picture of the most important reporting requirements.
• Consolidate software requirements into a high-level needs definition document that can be used to review potential candidates.

What you are trying to do here is analyze your organization from a business perspective. Your business requirements then will drive your software requirements. All you are doing here is building a picture of your organization as it exists right now, its strengths and weaknesses, how it can be improved, and how your accounting or ERP system can support these business requirements. As you proceed, don’t forget that any analysis must answer two fundamental questions: “How can we work more efficiently?“, and “How can we work more effectively?”

Efficiency and Effectiveness

Efficiency and effectiveness are two key business success elements. From an operational point of view, you want to minimize the cost of doing business per dollar of revenue. However, efficiency isn’t the only answer. People will want to purchase from you because the perceived and actual benefits (other than cost) of doing business with you far outweigh the benefits of purchasing from your competition. In other words, customer service is just as important as price. The way to maximize your customer service is to maximize the effect of what you do. People must work effectively as well as efficiently.

Basic Research

Before you launch into your analysis, you might want to spend some time on research or background knowledge accumulation. The more you know about software selection, the industry and specific products, the better prepared you and others will be when you begin your analysis.

Identify Requirements, Constraints, Strengths and Weaknesses

Your first step is giving people the ability to critique their own jobs as well as the organization as a whole. Give people the ability to describe their job objectives as they see them, critique the information that flows into them from other sources, critique their portion of the accounting system, and put into their own words what they believe the organization should do well and doesn’t do well.

While you want to launch this software selection process by meeting with most of the people who will be participating in the process, it will not be possible to meet with them personally to discuss requirements. Instead, create what I refer to as a Preliminary Needs Definition document and then let everyone fill it out. The format is open-ended text responses to specific questions as listed below. I have used the term “we” because individuals don’t feel very comfortable talking it terms that refer to them directly.

• What do we do now?
• What works and doesn’t work?
• What can we do individually to improve?
• What should we be doing that we are not right now?
• What changes should be made in the accounting system to help us work more effectively?
• What can other people do to help us do better?
• Are these goals or changes reasonable?
• Where is the organization today?
• Where should it be in the future?

Once the Preliminary Needs Definition documents have been completed (don’t forget to set a deadline), you can use the information to start developing a picture of what’s important.

Analyze Reporting System

The reporting system is the vehicle by which decisions are made, and is therefore just as important as functionality. Maybe you want to ask people to describe in very general terms the types of reports they require as well as the objectives of these reports (how people use them).

Analyze Corporate/Industry Requirements

This is a question suitable for executive management. Their specific areas of responsibility are the corporation, strategy and outside influences. Since they have a relationship with the accounting system as well, they must participate in this self-analysis as well.

Create Preliminary Requirements View

All of the information contributed will have to be consolidated into like categories. The category names aren’t nearly as important as the fact that the comments and suggestions in each category relate to each other. In addition to the categories, you might want to segregate the information into what might be called degrees of difficulty. By this I mean the complexity of the improvement required as a result of the critique or suggestion being made. At some point a little later on, it’s very likely you will have to accept, reject, analyze in more detail or postpone each item on this list. Ranking them according to complexity allows you to see very quickly which items should be placed in what priority range.

Expand/Contract Requirements/Improvement Documents

Once you have received all of the Preliminary Needs Definition forms, reviewed each in detail, and segregated them by function and degree of difficulty, you will still need to expand or contract this document depending on what has been received. Remember, this isn’t a detailed needs definition, but a working document that allows you to see more clearly the direction you need to take. Yes, you will have received a significant number of suggestions that will in all likelihood become part of your detailed needs definition, but it’s the analysis of your strengths and weaknesses which is of most importance at this stage.

Finalize Critical (Differentiating) Requirements

At this point you will have collected a lot of information regarding required functionality. Take the next logical step and decide the relative importance of each requirement. The most critical requirements will then be used to eliminate products that clearly should not be considered further.

Commitment to the Process

Now you have reached the point where you must dedicate yourself, your employees and your company to the process of selecting a new accounting / ERP system. I’m not suggest­ing this is anything like a holy crusade, but the commitment is similar. This project will consume a great deal of time and ultimately money to bring to fruition. There will be a tendency on the part of some to lose interest. Their participation and input is critical. They and you must support the project until it has been completed. This is the only way to insure the product you select meets your needs, and will be accepted completely by the people who will have to use it.

Summary

This first step toward selecting a new accounting or ERP system sets the stage for everything that will follow. If you don’t give people the ability to contribute toward the critique of your current system and even the organization itself, you may not receive suggestions that could otherwise prove to be quite valuable, and you run the risk of being seen as imposing a solution on people who have not been included in this process. These people may support your final purchase decision, but they could also resist any changes you might make or resist the new system. That you do not want.

We will move forward with our analysis in the next post by selecting several products for inclusion in the detailed analysis. Again, this isn’t a detailed analysis, only the first step. You could call it a high-level analysis or preliminary analysis. However, there is one step you might want to take of a preliminary nature. Knowledge is one of the keys to successful software selection. Once you have completed your preliminary analysis, you might want to talk to several vendors to learn more about their products, and of greater importance to learn more about what’s possible through today’s software.