MIS Toolkit
Software Selection and Implementation

Careful, thorough
Consider the following concepts and questions when looking
to buy, build or significantly modify a loan portfolio and/or
accounting software package. Ask your vendor and/or software selection and
consultant these questions and use the outcomes as part of the implementation pays off
software modification or selection process. Compare the in increased efficiency
answers below against your original needs assessment or
and lower costs.
business requirements to determine if the software is
appropriate for your organization. Throughout the process the MFI should ensure they are guiding the software development, deployment, implementation and training processes and procedures – not the vendor.
MFI Considerations
Software System:
o Is this the best system for this organization? Why or why not? o Does the system do what it is supposed to do?
IT/MIS Strategy and Planning:
o How do senior management and the board support existing IS/MIS and this new project? o Will the new system fit/match with the organization's goals today, tomorrow and beyond (3-5 years)?
o o o o
o o
IS/MIS Characteristics:
How complex will the system be (basic/simple or highly integrated/advanced)?
What module(s) will be used?
What are the expected numbers of transactions processed per day/week?
What types of transactions (batch, on-line, basic data entry, analysis and reporting) will
be processed?
Will the system integrate with any other systems? If so what and how?
What is the impact on the organization if the new system goes down immediately? What
about for one day or one week?
Training and Skills:
o What level of training exists at the partner (what, when, who provides)? o What level of system/application documentation will be developed? o Who will prepare documentation (partner, consultant, or vendor)? o How long do you expect to rely on consultants? o How will the vendor/consultant train the organization?

MIS Toolkit – Software Selection/Implementation
Information Security:
o Will automated access control (security) be maintained?
o If so, what types of automated IS/MIS security will be used (application, network,
database, operating system)? o How and who will control granting system access (application, operating system,
database, network)? What about access removal? o Will there be remote access? To whom, and how? o How will the new system(s) (hardware/software) and data be safeguarded from theft or
vandalism?
Integration:
o Will a separate database exist, or will it be integrated within the package?
Networks:
o Will there be a network? If so, what will be networked (files, printers, servers, email)?
Disaster Recovery:
o How will data backup occur?
o What median will you use and how often will it occur?
Policies and Procedures:
o How will the new transaction (business process) flow diagrams (maps) be developed?
By whom? o Will system configuration maps exist? Who will prepare them? How will they be
checked for quality, completeness and accuracy?
Data Quality:
o How will data quality (accuracy and completeness) be ensured (automatically by the
system, hash totals, manual reconciliation, ad-hoc reporting)? o How will incorrect data be corrected? Who is responsible for correcting inaccurate data? o How will the MFI and vendor manage and track data migration errors? o How will data scripts be reviewed to ensure complete and accurate data transfer? If there
are problems, how will they be mitigated? o How and when will the teams perform random data checking and querying activities?
Reporting:
o Will reporting be done automatically or manually?
o If automated, will the new package be used, or will a separate report writer be required?
Will there be pre-formatted or ad hoc reporting needs? o How will these reports be prepared, and by whom? o How often will reports be produced (daily, weekly, monthly, or quarterly)? o What established (required) reports are due to donors, other partners, and/or regulatory
authorities? Will these be developed by the vendor, consultant or your organization?

MIS Toolkit – Software Selection/Implementation
Vendor Considerations
Request for Proposal (RFP):
o Does your organization have an RFP process? If not, create an RFP process to solicit proposals from vendors (smaller MFIs will likely not get a response). Structure the RFP around the outcomes that you want the vendor to manage. Be as detailed as possible and use headings to link up to known functional areas.
o How and why did you select the software vendor to build or buy the software package?
o What differentiates this RFP from others? How do the RFP’s specifications match your original needs assessment?
o What type of vendor are you engaging for this project? Is this the appropriate vendor given your needs?
Choose the vendor carefully, use the RFP to structure the interaction - be warned that vendors will sell you anything. Pay attention to the details that they provide and/or your research into the functionality, implementation support, ongoing technical support, customization of reports and new features scheduled.
Vendor:
o What do you want out of a vendor? Vendors provide various services e.g. local networking and technical services, change management, custom software, updating current operational systems and customizing existing solutions.
o What types of vendors are there? Vendors either support specific products as a value added reseller (VAR) or support specific products as the sole proprietor (e.g. SHL).
Consultant:
o Do they know microfinance, financial systems and/or transactional systems? If so, how
did they gain this experience? o Do they know accounting? If so, where did they gain their experience? o Do they understand microfinance field operations? Do they understand the same model
as the one you are using? o Do they know business process change or total quality management concepts? o Do they have experience with change management?
User Acceptance Testing and Tracking:
o How will User Acceptance Testing and Tracking take place? By whom?
o How and who will develop the testing protocol?
o How will you track and prioritize any bugs, fixes, or changes?
o Will the organization use an automated tool? If so, who will maintain it, and how will
information be kept current? o How will the team (MFI, consultant and software vendor) share information? o How will the team ensure all of the changes, fixes and bugs are done by ‘X’ date? What
if they are not done?

MIS Toolkit – Software Selection/Implementation
o How will the MFI track its customizations separately from the general MIS software
system and application faults? o What functionality is missing?
o What are the critical path items? How will these be addressed? o Who has primary responsibility (MFI or vendor) to get them done? What if they are not
completed by ‘X’ date? o How much is an MFI willing to spend to get the expected (and needed) software and
reporting capabilities?
Application Development:
o What application development methodology will be followed?
o Who is responsible for upgrades, patches and fixes? What about emergencies?
o Will system requirements exist? If so, who will prepare (MFI, vendor, or consultant)?
What about their quality, accuracy and completeness? o Who will manage source code? Will the organization have a copy or will the
vendor/consultant retain ownership? o What if the vendor goes out of business? o Will a licensing agreement exist? Will the code be escrowed or retained by the
organization or vendor? o How will you track changes or system modifications? o How will the partner configure its chart of accounts? Will it be standardized or
customized? If so, who will perform (MFI, consultant, or vendor)?
Communication and Contingency Planning:
o Is everyone hearing the same message, and clear about priorities?
o Do all parties have the same understanding of tasks and major deliverables?
o How will the parties manage the project plan and any delays?
o What if discrepancies in plans, timing or delivery expectations arise, and escalation must
occur. Who has the authority and makes the urgent call to revise the project plan? o Will the MFI postpone or miss a project deadline to ensure functionality remains, or will
critical testing and data validation be skipped because “the project needs to get done”? o How do the parties ensure all the expected and agreed upon functions are included, and
comprehensively tested prior to real-time operation?
o o o
o
What is expected regarding documentation?
Will documentation be delivered along with source code and in what format?
Will help be provided via the software using either the F1 key or under the Help drop
down menu?
How much detail will the documentation include?
Documentation:
Version 1.0

MIS Toolkit – Software Selection/Implementation
Technical Capacity:
o Does the vendor have sufficient and appropriately trained staff with the depth of experience needed to complete the project on time and under/at budget?
Program and System Performance:
o As data stores increase in size, how will the software continue delivering within a
reasonable response time? o How will the system deliver rapid response times as the database grows? o How easily can historic records be accessed?
Functional Specifications:
plan? Does t business plan?
o Does the software offer the minimum functional specifications outlined in the business
o Does the software offer the recommended functional specifications outlined in the
Milestones:
o Choose intermediate and short term milestones - do not accept "everything delivered on
X date", make sure that there are short term goals and schedules. o Milestones can be created from the RFP or from your business cha the holding points or decision points for making the systems work.
Other Considerations
As an MFI moves forward, they should also consider:
o Is there sufficient time to review each of the critical phases before final sign-off?
o What is meant by final sign-off? Is this a point of no return?
o How were the original specifications/user needs incorporated into the final build? Is
there still a ‘one-to-one’ match or did scope shift? Do initial expectations still match the
final product? o As changes (i.e. system performance enhancements, reporting improvements, menu
fixes) are made, how does an MFI keep software development costs low, while
increasing organizational efficiency and effectiveness? What about the vendor? o How are data and program security maintained? o How are payments (vendor/consultant) tied to delivery milestones? o When and how will an MFI integrate an external audit into the software development and
implementation cycle? o How much of the original code will be changed to fit your organization’s needs? How
many new reports will be developed?