You are so close to being able to provide your group a collaborative infrastructure for project management that you can almost taste it!

You have come to the conclusion that improved project management, resource management, and metrics are key to reducing overhead costs and improving revenue.  You have created a prioritized list of benefits you need from project management software and you have contacted the vendors you are interested in while avoiding the 5 things you should never say to a project management software salesperson.

So many people quit at this point and pay dearly with their time, money, and reputation within their companies.  Now is the time to ask for references and follow up with live customers.  Most people don't realize the importance of getting this interview right.

Having been in the project management software business for nearly 10 years as a business owner and 4 years prior to that as a Ernst & Young Manager I can tell you the top 6 questions you need to ask the references of a project management software company:

1) Do you receive any form of compensation for being a reference?

This question is part of the probe to understand the true relationship between the reference and the vendor.  Obviously, if they receive compensation for being a reference they must be heavily discounted if not dismissed all together. 

2) Do you have any relationship with the vendor besides being a customer of the vendor?

You would be surprised how many of the references you will talk to are either Venture Capital (VC) companies, partners, or suppliers.  It is important before you spend any time with a reference that you qualify and quantify their relationship with the vendor.

3) What interactions did you have with the vendor before you purchased the system?

This question attempts to determine how comprehensive their search was.  Was it happenstance they found the vendor?  Did they fall prey to a fast talking salesperson?  Additionally, you are trying to determine if their needs going into the project management software selection process where the same as yours.  Ideally, the reference has no relationship with the vendor, receives no compensation, and had similar needs to yours.

4) What percentage of the functionality that you planed to implement have you actually implemented?

This is an open ended question to determine the difference between planned and actual achievements.  If they purchased a project portfolio management system and only implemented the timesheet functionality then there is a large disconnect between what they were sold and what they implemented.

5) Have you had any issues with the vendors performance and how did they resolve the issue?

This is a bit of a trick question.  There will ALWAYS be issues when working with a project management software vendor over time.  There will always be a difference of opinion on what was promised, implied, and delivered.  They key is to see if the reference is being honest about such inevitable problems, to learn the scope of the problems, and most importantly how did they resolve the problems.  A vendor trying to "make up revenue" after a particularly deep discount will ride their change management procedures to dramatically increase the solution price and blow your budget out of the water.  A vendor that provides "good will" to resolve issues will be considered a partner and will be much easier to deal with as troubles arise.

6) How long did it take from when you started implementation to when the system was adding value?

Many of the references you talk to are happy with their solutions.  However, the key to any implementation is time to value (when can you expect a return on your investments).  This is a great "comparison" question if you are down to several vendors you are trying to decide among.  If one company is happy but it took 12 month (or more) to receive value where another vendor's reference took 3 months to start returning value then you had better select the one with the shorter time to value less your implementation loose momentum and people forget why they wanted project management software in the first place.

What if the company is an online project management software vendor?

It is a little trickier if the needs are meager and you are considering an online project management software solution.  In this case Google is your friend.  I would start Google-ing the company's name and software solution followed by "problems", "bugs", "help" and other phrases the might turn up problems.  Another source of information would be any public groups (Yahoo Groups and Google Groups being the most widely visited) as well as any company sponsored forums.

From these public sources there are contact opportunities through the software were you can get in touch with experienced users of the customer's software to better determine the customer satisfaction levels.

Other considerations?

One final thing you may wish to inquire about or research is if the company is controlled by Venture Capitalists (VCs).  These companies often care little about solutions and are brought in to immediately maximize the profit via exit strategy.  What that means is they "pump" the company with money, buzz, and marketing and then "dump" the company to the highest bidder in an attempt to make themselves rich.  Software companies under the control of these forces typically are no longer run by internal management and are not likely to provide a long term partnering relationship vs. short term revenue and immediate profits.  Furthermore, when these companies do sell often the software is scrapped, significantly changed, or the price is increased to recoup the costs of buying the company.   Definitely something to be aware of as you look at potential suppliers.

This is my list based on my many years dedicated to this field.  What is yours?  What are your stories of working with vendors or references?  I would love to hear from you.

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