Packaged System Implementation

Some companies have chosen to outsource the implementation of packaged software, frequently to the vendor who developed the software, or to a niche service provider that specializes in the system. Unfortunately, however, the approach can be a dangerous one, and should be undertaken only after a careful consideration of the risks.

The reasons a company would outsource packaged software installation include:

■ Because the vendor is the expert, it can implement its software cheaper than IT can.

■ The vendor's implementation will be faster than IT's.

■ While these circumstances can be true, they do not address the primary concerns:

■ If no internal staff is involved, there is no knowledge transfer, and the company will be dependent on the vendor for ongoing support. Even if the vendor's support is cost-effective, the absence of internal expertise makes a future "divorce" more difficult.

■ Without internal involvement, the vendor may install a "vanilla" version of the software that fails to meet the customers' unique needs. Business knowledge is key to successful system implementation; and, while the vendor may have industry expertise, internal staff know the idiosyncrasies of their company and its customers best.

To minimize long-term risks, IT should consider using staff augmentation for system implementation. The company can hire the vendor's experts on a time and materials basis, requiring them to work with internal staff to transfer knowledge. Alternatively, it can contract for specific portions of the work to be done by the vendor at a fixed price. Such a fixed-price contract can be considered a form of outsourcing. In this case, it is important that at least one member of the internal staff be involved in the project. If that is not possible, perhaps because work is being done off-shore, a formal transition should take place once the work is completed.

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Project Management Made Easy

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