5 Critical Things to consider before buying a new software solution
A Critical Business Decision
When it comes to choosing software systems to run your business a common conundrum is the classic buy vs build choice. There are two choices when software is required to meet a business need. Purchasing an existing software application or Cloud Based Software Service (SAAS) or having a custom application written to meet your exact needs.
The choice is one of the most critical business decisions that can be made. The wrong choice can be disastrous while the right choice can bring big benefits for the business. “Very often that decision is not made until it is long overdue. We see companies start on spreadsheets and other collections of software that attempt to meet the needs over time. Rarely is the software thought out from a high level view in advance. By the time we talk, the pain threshold is already high.” says Mr. Barbato, CEO of Third Wave Technology in Boca Raton, Florida.
“Buy vs Build” can be a difficult choice, as out of the box solutions or SAAS solutions are typically less expensive, but can also be more limiting. Usually, the out of box solution forces a company to work in a certain way which may or may not be ideal for a given business.
Software integration should be a major consideration in your decision. Many software applications or platforms may not integrate with other business applications currently in use at your company. Although the software integration capability of newer SAAS solutions is improving, some have limited software integration or only integrate with a handful of choices. They also generally require custom software development to implement effectively. This may force you to use other software applications you may not want to. It could even force a painful migration to achieve some level of compatibility.
Many older industry specific applications typically meet most of the specific needs of a company, but suffer painful integration woes. “A lot of the software applications we see for smaller companies do a great job of meeting our client’s everyday needs. That is until it comes to software integration with other internal systems.” says Mr. Barbato. He goes on to explain “These limitations impose severe penalties on companies that result in significant manual duplicate entry effort, poor workflow and limited visibility of business metrics. “
The software vendors that produce this software typically don’t write open systems from the start. They may not have the budget or staff to keep the application up to date with rapid changing technology. Over time this results in a poor user experience and poor or limited software integration.
Support costs can also be fairly high and new feature requests typically come slowly if at all. Worse yet, most of the applications are not an open architecture making it difficult to create a seamless software integration required of the modern business.
With custom software applications, you have the opportunity to make them work exactly the way your business does. Software that matches the specific needs of your business model and processes. More importantly, you can design and build your software integration up front. This makes it easier to share vital data and break down the data silos.
All this comes at a higher cost that needs to balance with the potential return on investment. One of the biggest mistakes in cost consideration is not determining the true business value of having the system work the way your business works. The value of being able to share your data between your systems in a seamless way. “We have wrapped powerful software interfaces to allow our applications to seamlessly talk with our clients CRM systems, telephony systems for call centers, accounting systems and a lot more.” Mr. Barbato shared.
5 Critical Things to consider
1. What are the requirements of the new software solution?
Why do you need the new software, what business problems are you solving, what are your greatest pain points? Most importantly, ask yourself if you are willing to take a deep look at your current processes and operations and consider changing them. Not because of the new software, but because the old software may have forced you to work a certain way. Many workarounds over time have become accepted and passed down through the ranks.
2. Who will champion the cause?
Acquiring new software is a critical decision to your company’s future. Are you willing to put the time, effort and resources to ensure its success? This effort is often under estimated and the biggest factor in determining the desired outcome.
Who are the subject matter experts, who will be held responsible for the success of the project and working with the vendors? Most importantly, in a busy business life are we realistically giving the resources the time it takes to get it right?
Here is a hint: 75% of the time we have experienced that the critical resources needed to achieve success are unable to devote enough time to guarantee a good result and the vendor is left to make key decisions to save the project.
3. What other systems in your company touch your existing software?
Consider software integration as a key feature up front. From accounting, to ordering, customer service and more what systems need to share data with the software? Often the “other software” is not strongly considered until the contracts are signed and the work has begun. It is critical to look at all system and how each one should interact with the software.
It is the software integration with other systems that often delivers the most business value. Usually because the improved data sharing gives you a clearer, more accurate view of your business. If done properly, software integration can pave the road to analytics on trends and show what efforts are delivering to the bottom line.
4. What is the expected business value of a new solution?
ROI is always difficult to determine, but there are basic calculations that should be performed. This should include not only the benefit of a more efficient operation, but what opportunities may be opened by enhancing your technology. The enhancements could be in many forms such as new client channels or sales.
Most importantly, don’t forget to consider risk as a value. Depending on your industry, there is likely compliance and security considerations that are major factors in your decision making. For example, HIPAA or PCI compliance in a cloud based solution.
Overall, it is important to do the exercise of assigning business value and expected return to make sure your decision is worth it. This is also critical in determining the metrics for measuring a successful outcome.
5. Are you considering using a trusted software professional to guide you through the process?
A trusted software professional who understands both business and technology is vital to success. They can ensure your decision process is well informed on the available options, compromises and most importantly risks. This is a complex and fast changing industry and most of all you want someone who can understand your business, industry and how it can benefit your bottom line.