Key Elements of Selecting Computer Systems

This is part of the sub-web covering Selecting ERP, and other Application, Computer Systems. To go to the overview of this sub-web, please click Overview. To go to the web-site home page, please click Home.

Introduction

At various points in the life of any organisation, the existing computer systems no longer provide the information which the organisation requires, and it becomes necessary to choose a replacement system. Typical reasons for this include:

- a change in the nature, or size, of the business;

- the need for improved management information;

- a major increase in volumes;

- changes in the market or regulatory requirements;

- the pressure from competitors.

In the remainder of this document we aim to explain the work involved in selecting Computer Systems, and some background information.

A Few Key Points

The following key points about Computer Selection may form a simple basis for placing the subject in context. It is important that:

- the requirements reflect the needs of the organisation. Ideally, the organisation should have a Business Strategy and an I. T. Strategy, against which the requirements, and any proposed systems, can be checked. If these strategies do not exist, we can help produce them. For details, see some of our other factsheets and guides (see Downloads in our main web-site). In their absence, an intelligent guess has to be made, of the direction in which the organisation is moving;

- the opinions of the staff should be taken into account, in addition to those of higher management, as the former can identify the detailed workings of the organisation, of which higher management are unaware. In addition, this may lead them to identify with, and support, the new system;

- sufficient time and resources are allowed for the selection so that the requirements can be properly defined, suitable suppliers are identified, and adequate time is spent on training and testing;

- the implementation is properly planned;

- the specification and contract define what will, and what will not, be provided;

- the tasks to be carried out, by each party, are agreed and documented.

Broad Areas of Systems

Whilst many systems claim to be ERP (Enterprise Resource Planning) or MIS (Management Information Systems) you need to ensure that the chosen system adequately covers the relevant functional areas. The functional areas covered by the system commonly include:

- financial systems, including sales, purchase, nominal and fixed asset ledgers, management accounting, payroll, and, occasionally, specialist tasks such as currency exposure / treasury functions (companies with significant international trade), contract / sub-contract ledgers (building trade), disbursement ledgers (estate agents), client ledgers (solicitors), et cetera;

- commercial systems, including Sales and Purchase Order Processing, Stock Control, Order and Sales Analysis et cetera;

- manufacturing systems, including MRP I (Material Requirements Planning - including Bill of Materials Planning ), MRP II (Manufacturing Resource Planning - including Finite and Infinite Capacity Planning, and Production Scheduling), Work in Progress (or Process) Recording, CAD (Computer Aided Design), and CAE (Computer Aided Engineering), et cetera;

- office systems, including WP (Word Processing), DTP (Desk Top Publishing), Spreadsheets, Databases, Graphic Utilities, e-mail, Internet and Intranet links et cetera;

as well as specialist tasks related to particular industries. Examples can be as diverse as:

- stock exchange settlement system;

- estate agency property details system including a video tour of the property on screen;

- cloth layout system for clothing manufacturers;

and many others.

Corporate and I. T. Strategy

There are a variety of approaches to corporate strategy. Our usual approach, which results in the production of a strategy, or business plan, is to analyse the current state of the organisation, its future prospects, and the aims and objectives of the key players. Then the strategy explores the strategic options open to the organisation, discussing the appropriateness of each option, determines the most suitable option, and then identifies the actions needed to implement the strategy. Other forms of business strategic plan include financial projections and fund-raising plans, focusing more on the individuals involved.

An I. T. Strategy seeks to identify the I. T. systems needed to provide the information required by management, to assist them to achieve the objectives set out in the corporate strategy.

Developing the I. T. Strategy follows a very similar route to developing a corporate strategy. The user requirements are determined, the constraints of the corporate strategy, and existing systems, are explored, the options identified and explored, the preferred strategy agreed, and the steps needed to achieve it are identified and allocated.

If you require further information, the topic is discussed in various points on our main web-site, including a complete section on Corporate Strategy / Business Planning.

Existing Systems and other Constraints

Where a computer system is to be installed in an operation where none has existed before, the constraints are relatively simple, such as seeking to adapt existing manual systems to provide the information required. When an existing system is being replaced, then the conversion of data, and a smooth transfer, between the old and new systems, are of considerable importance.

If the new system has to link to other existing systems, then the requirements of these systems have to be identified and catered for.

In addition, any other constraints, which may impact on the choice of system, will need to be identified.

Project Objectives And Benefits

Before undertaking a Computer Selection exercise, the management of the business should clearly identify the objectives in undertaking this work and the benefits, which they hope to achieve.

Typically, the objectives may include replacing a system, which has been outgrown but should not, usually, including investing in technology for technology's sake. The benefits can be as general as survival, through intangibles, such as improved workforce relations, to the strictly financial, such as improved profitability.

All such objectives and projected benefits should be identified beforehand and kept in mind throughout the process as they could influence both the specification of the Statement of Requirements and the selection of suppliers invited to tender.