Wednesday, April 6, 2011

10 things to consider when choosing a Business Software Solution

A round number...impressive !

The choice of a business software solution is an important one. A business software solution is any software that manages critical enterprise data or processes such as an ERP, CRM, accounting software, inventory software, custom software, etc.

In his book, E-Myth, Micheal E. Gerber explains the importance of having systems in place for your business. Such systems make sure that you can consistently reproduce your operations and deliver the same quality of service time after time.  This is why it is important to choose a business software solution that will manage your operations and guide your employees in their daily routine.

Since this decision is critical, you must take the time to make the right one.  Every business being different it is important to ask the correct questions.

Here are a few things to consider before making your decision :

1  Budget

Obviously! Although the budget is an important criterion, it should not only be seen as an expense. Remember that a software solution will often help you reduce many of your operation and administrative costs and therefore should be taken in consideration when evaluating your budget.

Take the time to look at the costs but also your probable gains to determine when and if you'll break even and see a return on your investment.

2 Specifications

This is the easiest one. You want to make sure that the software you purchase meets your needs.  You should keep in mind that your solution :
  • Meets your current needs : Make sure your processes and your company information can be handled by the proposed software solution.
  • Meets your future needs : Try to think of what you might need if your company grows. Will this software solution handle the change? Can you predict what might change in your company in the next years? You wouldn't want to change your software solutions too often.
  • Handles your past information: Can you migrate your current databases or data in the new system?
One thing to mention concerning the « meets your future needs » is that you don't want to put in place a solution that contains too many unused functionalities. If you try to predict too far ahead you'll get cluttered in a maze of functionalities and you might not enjoy the software as much. Ideally you want to add the functionalities as your needs evolve and not before. I promise to write a post on the subject  because I feel this is often misunderstood.

3 The Team in Place

Never forget who will be using the system.  Maybe you are an adept to new technologies but are your employees? It shouldn't necessarily stop you but there are things to consider :

  1. The comfort zone : New solutions are never as well received as we'd hope.  Even though the software should help the employees in the long run, some will be annoyed by the change.
  2. Tech savvy : How comfortable are the employees with software? Did you have a software solution before and are simply replacing it or were you working manually and are implementing a software for the first time.

In any case, I definitely recommend that you get your employees involved in the process.  When you get demos or that you try out the solutions of your potential providers, make sure your employees also tag along.  Not only do you want them to feel their opinion is weighed in the process, but they also know the smallest details of your business.  As manager, we often forget small operation details or exceptions that need to be taken in account when choosing a software solution.

4 Customization

In my second point I was writing about the importance of thinking about the future.  It is impossible to predict exactly how our operations will be altered or every new situation that might not be covered by your software solution. So even though the software satisfies your needs today, it might not be the case later on.

That's why its important to see what are your customization options for your software solution.  If there aren't any or if the customization options are limited, you might have to change the solution altogether later on.  Nothing lasts forever so you might have to do it eventually but remember that changing a business software solution is costly and quite strenuous for your employees.

5 Payment Model

Depending on the type of business software solution that you choose, you will have different payment options : monthly payments, yearly payments, single or multiple payments.

Take the time to listen to the types of payment your provider offers and also see if he offers any financing options (when applicable).

6 The Provider

This is obviously key. 

Please don't read this as « choose a huge company ». I definitely don't believe that bigger is better. Bigger enterprises will often have well known out-of-the-box products but you'll often find more flexibility in smaller enterprises. 

What I will recommend though is that you ask for references on your potential provider. You definitely want to validate the level of satisfaction of their clients to help you make a decision.

Its especially important to have the uttermost trust in your provider. Communication is key in the process of changing or implementing a business software solution for it is quite long and strenuous. Make sure to keep the process as simple and pleasant as possible.

7 Deployment Type

Are the solutions « Cloud » based and therefore accessible directly by Internet? Does it require to be installed in your office? Will it be hosted at a third party location? If its hosted at your location what kind of servers are required? Who does the backups and at what frequency? Where are the backups held?

Each type of deployment solution has its pros and cons. Without going in too many details (I'll try to do it in another article) its important to take in account the maintenance costs and the flexibility each of the deployment options offers.

8  Support and Maintenance

Don't forget to ask your potential providers what support plans they offer.  You want to know what kind of response time you will get in case of a failure, bug or simply if you have an important question. What are the service hours? Are they opened on nights and weekends?

Some will offer different rates for different hours or different response times.  Check to see if their plans satisfy your needs.

9 Intellectual Property

This is one of the aspects that leads to the most confusion.  The software intellectual property belongs to the company writing the code unless otherwise specified in a contract.  Therefore if you buy a software solution, the intellectual property more than likely belongs to your provider.

Generally, your provider will give you an end-user, modification, and/or distribution licence with your software.

So even though you ask a provider to build a software solution from scratch, the source code belongs to him. You can negotiate to have a different licence agreement or to have the intellectual property transferred to you but not all providers will accept to do so.  If they do, however, you will probably end up paying more than for an end-user licence agreement.

Intellectual property is a complex matter that I'm quickly summarizing to point out the implications of the matter. When the time comes, make sure you get fully informed of the implications of the type of licence that you are purchasing.

10  Technology

This doesn't necessarily apply to all but if you're having a customized software solution built for you and that its intellectual property belongs to you or that you have a licence given you access to the code, make sure the technologies used to build the solution are popular and up-to-date.  If for any reason you need to switch providers, you want to be able to find other providers that are comfortable with this technology.

To conclude, this article is written to give you a few hints of what you should think about when shopping for a business software solution. It is possible that some of these points do not apply to you or for the software solution you are aiming for.  But if you're going after a CRM, ERP or any enterprise wide solution that manages a large part of your operations, you should at least read through the different points and consult an expert if you're not sure of the implications.

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