Enterprise applications are expensive. Projects like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) involve a formal process to define requirements, shortlist vendors, and conduct due diligence. This process is ultimately guided by the selection committee. Use Info-Tech's guidelines to establish an effective selection committee.


Recommendations for Establishing a Selection Committee

1. Decide: technology replacement or business transformation. Enterprise application projects fall into two rough categories. Technology replacement projects involve replicating existing functionality on a new platform. Business transformation projects involve the acquisition of new technology to drive strategic change within the enterprise.
The selection committee for replacement technology can be mostly comprised of IT staff; the selection committee for business transformation projects must include representation from senior members of affected business units. The rest of the recommendations apply primarily to application projects for business transformation.

2. The project sponsor isn't from IT. The selection committee must include the executive that is the primary advocate for the project. A CRM project, for example, will likely be sponsored by the Chief Marketing Officer, Vice President of Sales, or Vice President of Customer Service. These sponsors should have both knowledge of detailed processes and some influence with senior executives. A common choice for accounting or ERP projects, for example, is a corporate controller.

3. Three members at a minimum. The minimum selection committee has three members: someone from senior management, someone from the affected business unit, and someone from IT. A committee of this size is typical in small companies that lack dedicated purchasing functions. Projects involving a larger number of business units will include more team members. Project managers - while still an important component of teams - are generally not part of the selection committee.

4. Cap at seven members. Selection committees with more than seven members become unwieldy and bog down in common processes. A selection committee with odd numbers of participants also helps avoid deadlocks during various scoring activities.

5. Sub-committees are appropriate in certain situations. Selection committees may elect to include other members at particular junctures in the project. The IT contingent, for example, may temporarily include experts on data center issues when conducting due diligence on various application options. When assessing functional specification or requirements, the committee may recruit managers with detailed knowledge of operations such as purchasing or customer management.

6. Directors are best. Selection team members must have knowledge of both functional processes and the strategic goal of the enterprise. Directors often contain the appropriate mix of knowledge. More senior staff - with the exception of the project sponsor - often lack the appropriate level of detailed knowledge while junior staff may either lack insight on strategic direction or be too resistant to process change. Junior staff can, however, fill an important role in sub-committees. Similarly, C-level executives may have an important role for affecting process change.

7. The C-level hammer. Certain projects may involve units that are particularly intractable and resistant to process change. Design engineers in manufacturing environments, for example, often resist new tools due to a perceived loss of authority. In these situations, include a COO who has the mandate to drive the uptake of new tools and processes.

8. When there's Purchasing, include Purchasing. Enterprises with a dedicated purchasing function must include this business unit in the selection team. This committee member will bring valuable knowledge of the enterprise's purchasing policies and processes and can be very effective for negotiating terms and conditions. Very large organizations should also include representation from the Vendor Management functions of the enterprise if they are discrete from Purchasing.

9. Go with quality. Certain business units may view the selection committee as an opportunity to move underperforming staff out of the department. If committee members are not qualified, they should not be on the committee. The project sponsor should act definitively to eliminate this type of behavior. The use of a C-level hammer (see above) may also be effective.


Bottom Line

An effective selection committee is crucial when acquiring enterprise applications like CRM or ERP systems. Info-Tech's guidelines provide a framework for establishing the right committee.