Part VI: Economic Issues and Moving Forward
Mistake 4: Not Considering Other Factors
Demonstrations should not be the only basis for choosing learning infrastructure components. They are just one factor and should be weighted with several others. Table 5.4 indicates other key factors to consider in decisions about infrastructure purchases.
Using these issues — as well as others that may be important to your organization — create a decision matrix that compares vendors side - by - side on each of the issues. This gives decision makers a complete picture of each vendor, not just a feature match. It is often useful to rank order vendors after demonstrations. You can then do a more thorough evaluation on the highest - ranked vendors. An example of a vendor decision matrix for an LMS is provided at the end of this chapter.
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Table 5.4. Additional Factors to Consider When Purchasing Learning Infrastructure Components
Technical Assessment of the Underlying Technologies
Analyze the underlying technologies. This review should address long-term support for, and viability of, the underlying technologies. Determine the following:
Whether the technology is built using an industry stan- dard programming language or is proprietary. Propriatory systems add risk if the organization wants to change vendors, if the vendor is purchased by another vendor (common in the industry) or goes out of business.
Whether the product conforms to desired learning stan- dards (see the next chapter for more details).
Both for expertise as well as internal politics, invite the IT staff to help you conduct this analysis. If they are not available, hire a consultant and keep the IT department in the loop. To avoid potential conflicts of interest, have the consultant sign a statement that he or she has no business dealings with, or ownership stake in, any vendor whose applications are under consideration.
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Assessment of the Compatibility of the Proposed Learning Technology with the Organization’s Technology Infrastructure
In addition to an assessment of the underlying technology in general, also assess its compatibility with the existing technology infrastructure of the organization. Determine the impact of adding the learning infrastructure on over- all system performance. Ideally, use the same people who assisted with the overall technology assessment to perform this assessment, too.
Assessment of the Application Development Process
Review the process by which the vendor develops applications to assess:
To what degree is development influenced by customer needs? Does the vendor have a customer advisory group to provide input? How big is it? How long has it existed?
How often do they meet?
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Table 5.4. Additional Factors to Consider When Purchasing Learning Infrastructure Components, (Continued)
How much and what type of support is available during and after implementation of the application? Is support provided by full-time support staff or by developers who are reluctantly performing this responsibility as an add-on task?
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Business Fundamentals (Also Called Due Diligence)
Verify the viability and reliability of the vendor. To assess viability, assess the financial viability and credit worthiness through SEC filings (if they are a public company), or consult an industry analyst if the vendor is private. (You may need to purchase a report or pay for consulting services to obtain this information, but a few thousand dollars up-front might save hundreds of thousands of dollars or more later on.) References Find out how customers really feel about the product. At
least contact the references provided by the vendor. You might also check satisfaction surveys. Note, however, that companies supply the names of their customers to the ser- vices evaluating satisfaction, so the sample might not neces- sarily be a representative one.
This also raises a more significant issue: the most honest references are ones not provided by the vendor. So do some private networking and sleuthing to find other customers.
Check marketing documents, case studies, and quarterly and annual SEC filings that refer to customer implementations for companies. Also ask the vendor to provide a list of customer implementations in the prior twelve to eighteen months and randomly call customers from this list. Also attend confer- ences in the industry to find and talk to customers.
Cost Analysis On a financial basis, determine whether to lease or purchase the application. Request quotes for both options from the vendor, and ask the estimate to cover a two- to three-year period. Make sure that the purchase price covers support and maintenance. In general, the annual lease
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Table 5.4. Additional Factors to Consider When Purchasing Learning Infrastructure Components, (Continued)
cost usually is 30 to 40 percent of the purchase price, but includes basic technical support and maintenance.
In addition, plan for the purchase of additional assistance to train administrators and users, unplanned changes (but budgeted all the same), and to support internal users.
Exit Strategy Specifically, consider how to exit the purchase if, after a period of implementation, the product does not work as expected.
Similarly, if negotiating a lease, provide a clause that allows an exit at one year if performance is unsatisfactory.