Going beyond the contract: Proactive vendor management for ERP success

How CAI partnered with a state to deliver business transformation services

In the U.S., state government offices are bustling places. These offices focus on promoting their state’s economic development, showcasing state history and preserving heritage, facilitating access to governmental and educational resources, protecting public health and safety, and much more. For one state in the midst of business transformation efforts, they recognized a need for a modern, agile software solution to support their enterprise resource planning (ERP).

Inefficient and cumbersome legacy technology

This state was in the throes of business transformation; carefully reviewing business processes, identifying bottlenecks, and spotlighting where manual effort existed. Replacing a decades-old, heavily customized, on-premises ERP software was a top priority in these efforts.

Imagine a public sector organization as a human body, with operational tasks like payroll and accounting being carried out independently, but still connected to the body as a whole. The ERP software system acts as an agency’s central nervous system. This software helps to efficiently manage crucial processes and operations by connecting them in an integrated system.¹ Recognizing the complexity and effort this would entail (in addition to the enormous impact it would make on the organization), the state knew it needed outside expertise for the end-to-end initiative.

The state’s legacy ERP presented several pain points, it was:

• Inefficient, requiring excessive time and resources to operate
• Outdated, lacking the capabilities of modern systems
• Reliant on manual entry across multiple modules and systems, increasing the workload for staff, as well as the risk of duplicate entries and input errors
• Heavily customized, making maintenance/upgrades costly and difficult to maintain

The state wanted to go with a cloud-based platform that could span pension, finance and accounting, human capital management, and payroll. Given the size, complexity, and critical importance of this investment, the way the state approached vendor selection would determine the success of the entire program.

Beyond the system challenges, the state also experienced the limitations of a reactive vendor management approach. Too often, vendors were brought on board without a clear framework for accountability, and issues were addressed only after they emerged. The state recognized that with an investment of this magnitude, they needed to take control of the process, starting with procurement. They hoped this approach would set clear expectations, avoid common pitfalls, and help them select the right partner for their unique needs.

Based on CAI’s successful track record with a similar engagement at the county level, the state reached out to CAI for support. The state valued not only technical knowledge of ERP modernization, but also the ability to manage vendors strategically, and bring diverse stakeholders together around a shared decision-making framework. This combination of unique expertise made CAI the right partner to build the modernization effort on a strong foundation.

RFP and KPI creation for vendor selection

CAI partnered with this state to design and execute a vendor selection process that went far beyond a standard request for proposal (RFP). The goal was not just to gather information, but to actively manage vendors from the very beginning, ensuring the potential vendors demonstrated how they could meet the state’s specific needs.

CAI and the state project teams spent significant time working with agencies and departments to capture their detailed functional and technical needs. This effort affirmed that the RFP reflected the full breadth of state priorities. The RFP included not only business requirements, but also user stories describing real-world functions the state needed to see in the new system.

Together with the state, CAI developed key performance indicators (KPIs), documenting both current-state values and desired future-state targets. Vendors were required to state whether they could meet each KPI, or, if not, what alternatives they could propose. Extensive supporting attachments were included for transparency and clarity.

To ensure the RFP would stand up in practice, the CAI team researched and reviewed RFPs from other states and municipalities, analyzing where they fell short. Then, they were able to incorporate lessons learned from direct conversations with peers in government.

Once vendor proposals were received, the CAI team designed a detailed assessment scorecard. This allowed evaluators to check responses consistently across all functional areas, as well as technology, security, and even the general reputation of each vendor. This structure gave leaders confidence they were comparing “apples to apples.” As a result of this process, the state identified three vendors that best aligned.

Designing robust demonstrations and scorecards

Instead of inviting vendors to present generic product demonstrations, CAI and the state project teams developed a comprehensive set of demo scripts. These scripts required vendors to walk through not only standard processes, but also state-specific scenarios. This ensured evaluators saw exactly how the system would perform in the state’s digital environment.

Another scorecard was created to evaluate demonstrations, and CAI worked with state leaders to agree on a scoring strategy; 40% weight on the written RFP and 60% on the live demos. This balance ensured that while written commitments were important, vendors also had to show they could deliver in practice.

A critical part of this engagement was facilitating decision-making among a diverse set of stakeholders. ERP modernization impacts nearly every corner of government, and leaders from different functional areas naturally have different priorities. The CAI team guided discussions, allowing stakeholders to weigh trade-offs and come to agreement on scoring and final selection.

The scorecards provided structure, but they were not the final word, only a guide. The real value came from the conversations that were facilitated, helping the state teams to reach consensus based on both quantitative evaluation and qualitative insights.

CAI involvement didn’t stop at vendor selection. We continued to work alongside the state through contract negotiations, ensuring that the commitments vendors made during the RFP and demonstration process were carried forward into contractual language. This step was essential for maintaining accountability and protecting the state’s interests.

By taking a proactive, structured approach, the CAI team made it possible for the state to:

• Receive high-quality, detailed vendor responses aligned to its real needs
• Compare vendors on a level playing field, with transparency and rigor
• See live demonstrations tailored to specific processes, not just generic product showcases
• Bring together leaders across government to reach consensus on the best-fit solution
• Enter contract negotiations with a strong foundation for accountability

In short, this approach shifted the dynamic. Instead of reacting to what vendors chose to present, the state actively managed the process to ensure vendors delivered what the state needed to make an informed decision.

Lasting results, long term success

Although this stage of modernization focused on procurement rather than implementation, the state achieved meaningful results, such as:

• Value-driven vendor responses that went beyond boilerplate proposals
• Confidence among stakeholders that their voices were heard and their priorities represented
• Agreement among leaders on a selection process grounded in evidence, not guesswork

Most importantly, the state was able to select the right vendor for its unique requirements, establishing a foundation for long term success. Prioritizing vendor management at the beginning, instead of after a vendor is selected, proved to be tremendously beneficial. By investing in a detailed RFP, structured evaluation, robust demonstrations, and facilitated consensus-building, this state agency was able to proactively manage the process, select the right partner, and enter negotiations from a position of strength.

This proactive approach has already paid dividends, giving the state confidence in its chosen vendor, and laying the groundwork for a successful, sustainable ERP modernization that will serve citizens for years to come.

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