• Tool Selection: the 5 key pitfalls to steer clear of

This is a meeting you do not want to be seen at. It is not often that you sit at the table with the CFO, and now it’s for all the wrong reasons. The Performance Management package that was purchased with a lot of fanfare six months ago has turned out to be a dud. Despite the slick demo, it seems that the solution cannot even do the bare minimum of what it should. The vendor seems to have different priorities. Colleagues from other departments have already lost faith and are quickly and strategically distancing themselves. Now you have to explain it to the CFO.

What could you have done to prevent this meeting?

By Tom Borsboom, June 2020
  1. DON’T BE DAZZLED BY THE ANALYSTS’ RESULTS

    Magic quadrants” or “waves” may seem to be a signpost to a safe choice for a new solution. After all, who has ever gotten in trouble for choosing a solution that was labelled as a market leader by a respectable analyst? However, many analysts’ reports on the choice of a Performance Management solution offer merely an illusory certainty. Almost 75% of any magic quadrant from Gartner is based on research among users in the United States. Unfortunately, crucial requirements for such a solution in the Netherlands are not relevant in the States. A “leader” according to US standards may not even meet the basic requirements in the Netherlands.

  2. DON’T MAKE YOUR CHOICES ON YOUR OWNTool Selection Pitfalls

    With the rise of cloud solutions, purchasing a new Performance Management solution seems to have become as simple as installing a new app on your phone. This makes it tempting to just buy a solution with your team of controllers, e.g. for planning and budgeting.
    But making this kind of purchase with just your own team is often a recipe for disaster. Other departments look at solutions from a different perspective. They ask the questions that need to be asked. A good IT department checks data security and the ownership of the data. Purchasing knows how to find hidden costs. All of these issues can become nasty surprises later on and cause major problems.

  3. LOOK BEYOND THE FEATURES

    In many selection processes the requirements are neatly mapped out. Once everything is outlined, RFIs are dutifully sent out asking if the vendor can meet these requirements. It is a trusted best practice that unfortunately provides little useful information and does not really show the differences between solutions.
    You cannot get a good picture of a solution by only looking at the features. You have to drill deeper. Have a look at the characteristics of the vendor, for example. How are they financed? If there is private equity involved; how long have these individuals been on board? If the vendor has been taken over before; are the key figures who were the spiritual fathers of the solution still on board or have they cashed in and are now lounging under a palm tree? These kinds of questions tell you more about the future of a solution. Probe beyond the features, which are often no-brainers if you are looking at the right category of solutions.

  4. DON’T AUTOMATICALLY FOLLOW THE MARKET

    Following in the wake of your industry peers is a common phenomenon. You will find certain Performance Management solutions spread throughout an entire sector. In a market where the solutions came with a new release every few years, this seemed a safe bet. However, the world has changed. Some cloud solutions come up with new releases four times a year. New functionalities and new integrations appear every quarter. Since changes are coming so fast, automatically following the choice in your sector may mean you are lagging behind.

  5. DON’T OUTSOURCE THE CHOICE TO IT

    Tool selections are choices that are sometimes seen as high-risk. After all, you do not want to find yourself in the situation outlined in the introduction to this article. That is why sometimes the choice is “dumped” on the IT department. It’s a tactic that hardly ever has a happy ending. The biggest problem is often not the actual choice, but the lack of commitment to that choice by the future end users. If they don’t believe in it or aren’t four-square behind it, it will be hard to make it a success.

THE WILL TO MAKE IT A SUCCESS

There are thousands of reasons why a Performance Management project could fail, but there is a single reason why they succeed: the will to make the new solution a success. That desire has to grow from day one of a tool selection and it should be shared by everyone involved.

 

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