At one time or another, companies find themselves evaluating potential software partners. Even we at DMSi, who make our bread and butter by being chosen as software partners, go through this process when evaluating vendors to integrate with our software.

To make a wise investment in software, we’ve found that you need to know if a vendor can deliver the things that matter most to your business. But software vendors all create slightly different products. Companies that prioritize systems that work like their current system might end up with software that has what they want. But they may find that the things they need are missing.

As a software vendor, we know that vendors react to prospect information and demo functionality accordingly. We also know that companies often choose new software using a formal Request for Proposal (RFP). The reasoning behind RFPs is simple: with enough information, the “right” decision emerges. The process involves:

1. Make a list of all required and desired features.
2. Ask vendors if their system has each feature.
3. Allocation of points for each answer.

Presto! The vendor with the highest score has the best software. Right? Bad. While RFPs can be a useful tool for a business to start understanding what different vendors are offering, they can also lead businesses in the wrong direction.

This is because RFPs prioritize software features over business needs. As dashboards, RFPs ask questions with simple yes/no answers, such as “Does the system have X functionality?” A RFP does not include key questions such as “How can your system help us reduce costs?” Without open questions, deeper discussions are missing.

Say hello to RFI

So what’s a business to do? How can you be thorough without missing (lumber analogy) the forest for the trees?

We suggest a simple twist on the RFP by making it an RFI (Request for Information). An RFI begins by replacing must-have features with much-needed business enhancements, then asks a potential vendor what their software can do to address the enhancements.

It makes sense. Business goals drive every major business investment. From opening a new site to adding a new product line, companies pursue actions that help increase revenue, build customer loyalty and increase market share. The same logic should apply when choosing new software.

To create an RFI for choosing new software, review the following three questions and record your answers:

1. STRATEGIC OBJECTIVE: What should the company focus on to be successful over the next 10-15 years?
2. BUSINESS STRATEGY: What should we prioritize in our operation to achieve this goal?
3. IMPROVEMENT OBJECTIVES: How can we change processes to better achieve our goals?

Finding the answers takes time and discussion, and you will need to include management’s ideas. But once you’ve completed this exercise, you’ll have what you need to ask the most important question of your RFI: “What can you, the future software vendor, do to help us?”

Instead of a feature checklist, vendors will talk about your specific business goals and the different ways the software could help you achieve them.

With business goals at the center of the conversation, it should become much clearer what a software vendor can offer and who you’ll want to partner with. After all, switching software is a long-term commitment and you want to know exactly what you’re getting. With an RFI, you’ll enjoy the chances of choosing the right system to help your business achieve those goals and the right partner to help you do it.

– Anthony Muck currently serves on the NAWLA Leadership Summit Committee. He is vice president of sales and marketing at DMSi, a company based in Omaha, Ne. providing business management software for the building materials industry (www.dmsi.com).