Performing a Market Analysis for Your Software Project Solution – Part 2

In Part 1, I discussed getting started on performing a market analysis for a large software project undertaking.  Utilizing a market analysis can help you, as the customer, select the best possible vendor and software solution for your project. 

So far, we’ve covered the following phases of the market analysis:

• Phase 1 – Document the Requirements – This phase requires that you – the customer – have your business processes well mapped out so you will be able to amply rate the potential vendors against what you need your “to-be” solution to be.
• Phase 2 – Identify the Potential Sources – Here you identify the key players in the market place.  These are the vendors that you will solicit input from and ask to perform demos, webex’s, etc. for you.  Of course, your project needs to be well worth their while…but we’re assuming a large enterprise-wide software undertaking that is likely to be big $$.
• Phase 3 – Beginning the Dog and Pony Show (really this should be called the Vendor Invitation phase) – In this phase, you make your first contact with the vendors, explain your needs and invite them to participate.  They, in turn, will start to ramp up for the analysis that they are about to participate in for the next few weeks.

Enough recap, let’s move on to the next phases.

Phase 4 – Vendor Research – Round 1

As mentioned in Phase 3, let’s assume you’re looking at 8-10 vendors and those are the ones you’re inviting to the party.  If your project is pretty large – and we’re assuming it is – then you should have no trouble getting them interested and willing to participate.

Remember, you can’t run the whole market analysis with that many potential vendors.  Well, you can, but it will be too lengthy and expensive.  It makes more sense to break it into 2-3 rounds and eliminate some vendors along the way.  For Round 1, I’d recommend trimming it by 3-4 vendors down to a maximum of 4-6 offerings.

Initially, I suggest sending out a high-level questionnaire identifying some of the qualifying show-stoppers and asking for vendor responses on how they meet each qualification.  For example, if you need the software solution to run on Windows Vista or they can’t be considered, then that needs to be asked as part of the initial screening questionnaire.  If you need a vendor that has a particular expertise…for example has experience with large-scale government installations or is certified for ‘x’ or ‘y’ then you that needs to be included in the initial screening.  If you need a vendor’s software to run with SQL or else you can’t include them, then that needs to be asked as one of the intial screening questions.

Identifying 10-20 critical must-have items on the vendor questionnaire will enable you or your team to weed out those vendors that can’t even meet the minimal requirements of the undertaking.  It’s sort of like looking at the system requirements of a piece of software before you buy it.  If it doesn’t match your OS or your computer doesn’t meet it’s minimal requirements, then you’re not going to buy it.

Let’s assume that this initial screening removes 3-4 vendors and now you’re down to 4-6 vendors for the 2^nd round.  At this point you send emails – and follow-up with phone calls, if necessary – to each of the 3-4 vendors that are being eliminated. Thank them for their participation and explain that they do not meet some critical requirements for the engagement will not be considered further.

Phase 5 – More Detailed Vendor Research – Round 2

Now you’ve eliminated a few and you’re down to 4-6 vendors to move on to Round 2.  Contact those vendors via email and phone to invite them to continue with the market analysis and explain what is intended for Round 2. 

My suggestion for Round 2 is a high-level demo performed by each vendor outlining their software capabilities and particular expertise in relation to your needs for the project.  To allow each Round 2 participant to adequately prepare for their presentation I would suggest preparing a high-level version of your project requirements.  It’s still too soon to provide too much detail – we’ll save that for the next round and a more detailed demo from each finalist.  At this point we still want to keep it more high-level so as not to waste too much time and effort on vendors that aren’t going to make it to the finals.

Prepare the high-level requirements – you’re past the must-haves but you can identify another 20-40 critical needs of the system (or more or less depending on the number of requirements and the size of the project, I’m just picking a number here).  Send those to each of the vendors and give them 1-2 weeks to prepare for a webex demo of their software and expertise.  I’m suggesting webex for this round because face-to-face is not really necessary yet – save that for the next round and save the extra time and save the vendors the cost of travel.  A good idea would be to ask each vendor to record the webex and send it to you afterwards so that you’ll have it available for analysis should there be confusion over how well a vendor meets a requirement.

Next

Next will look at further reducing the number of vendors as we move toward finalizing a best and final solution for your project.

Related posts:

1. Performing a Market Analysis for Your Software Project Solution – Part 3
2. Performing a Market Analysis for Your Software Project Solution – Part 4
3. Performing a Market Analysis for your Software Project Solution – Part 1
4. A Quick Guide to Performing a Vendor Market Analysis for Your Large Project
5. Performing a Market Analysis for Your Software Project Solution – Part 5