Part 3 – Redesigning your budget process: Due diligence

By - January 13, 2016

In part 2 of this series, Redesigning your budget process, I discussed the system selection process with a U.S. based manufacturing company’s budget process and their decision to select a budget solution. Their primary drivers were heavily leveraging excel, a many month timeline, laborious processes and difficulty to maintain credibility in the process. Following the needs assessment and system selection process the team has narrowed their vendor choices to three primary vendors.

The due diligence was three phases:

  1. Vendor demonstrations.  Following the first round of demos we were able to further narrow the vendors to two solutions and requested onsite demonstrations. Prior to these demos we sent specific tasks we wanted to see, focusing on items of concern. During these demos we were able to ask more specific questions and further learn about the vendors and whether they seemed like a good fit for the company.  We requested each vendor provide a 60-90 minute webinar that would outline the client’s specific needs. We wanted to understand how the tool would best be used and any limitations. Each attendee was provided a scorecard in advance of the demo and was encouraged to track their opinions, what they liked and didn’t like during the review. We would then use those to collect all feedback and discuss as a team.
  2. References. Requesting references is always a bit odd as vendors wouldn’t give you a bad reference. But you do need to check them. Asking for clients of similar type to yours is great, but not always possible to produce. It is important to get someone that has been with the vendor for 2-3 years, someone currently in the implementation process and someone who has been fully implemented for a year. Across those timeframes you should be able to gage the support levels and timeliness provided by the vendor. Using a questionnaire and the same people to do the calls is important to confirm they are being assessed consistently.
  3. Negotiate contract. Finally a vendor is selected and the contract needs to be reviewed. Determining your best case scenario before you start the process is important. Review the entire contract pricing, legal, SLA’s and track all your needed changes and those which you are willing to give on. Go to the vendor with all at once.

In part four of this series, I will discuss the design and implementation process. In the meantime, to learn more about how RSM can assist you with your other business needs, contact RSM’s management consulting professionals at 800.274.3978 or email us.


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