A story from the vault.
Sometimes having the best functionality or cheapest price should not be the deciding factor. One of our associates worked as an auditor and found the best software for his organisation. It covered all the main functionality requirements and came in well below budget. The only thing was that a one-man band developer had developed it and my associate couldn’t justify the benefits against the risk of the supplier being a small-scale enterprise. This may seem unfair as it doesn’t give the small entrepreneur a break, but in software, longevity and potential for development are major factors. If that one-man band developer was run over by a bus, then the organisation would be left with a legacy system with no possibility of support or upgrades.
Who are you buying from?
Software costs a lot of money to develop, test and bring to market so larger organisations tend to have greater resources at their disposal for research and development. It is also an ever-evolving arena, so new potential advantages often give one the edge in the marketplace. If a vendor is cheaper than the others, that would imply they will have less cash at their disposal to put into development, which leaves your current purchase at risk of being out of date very quickly. Also, resources such as support or on-site assistance maybe lacking. Also some technical considerations may come to the fore at this point. Most software is built on an existing platform that will depend on computer standards and languages and these should be scalable to accommodate possible future requirements. For example a database language such as SQL, which is also a standard, can be upgraded to include increased users and performance if required.
In saying that, just because you are dealing a large organization, doesn’t guarantee that you get the expected level of service. One of the largest software houses in the UK is quite content to provide only nominal upgrades and at best mediocre support for their flagship product. As they have the major market share, there is no inducement to improve and they have become lazy in feeding off an old cash cow. Some smaller entry-level providers have more hunger for business and run committed support teams that I have found excel against larger organisations.
Check with other users of the product.
As with a job interviewee, you check their references. A software product will have case studies and lists of customers who can give you honest feedback on what they think of the product and issues they may have had. The feedback to look for should come from an unbiased viewpoint. Keep in mind that some sources may have an axe to grind on an issue that doesn’t affect you. Again, ask questions based on your business case and your functionality list so that you filter the answers for relevance to your business model. Some of the users may be coming from a different set of presuppositions, which are not relevant or may have coloured perceptions.
One payment or regular instalments?
Increasingly Software as a Service (SaaS) is the preferred financial model for software companies. Although some business owners want to just pay a one off price for the kit, as they would for items of hardware, in most cases that is not appropriate for an abstract product such as software. Software as a Service usually benefits both parties as it guarantees continual stable income streams for the software provider that pays for continuing development and support and spreads the cost for the customer across a longer time period making the purchase easier on the cash flow. Software that costs millions of pounds to develop and that used to be charged as a one off fee up front, was often unaffordable for most businesses.
Be aware of Brand Power.
As with all commercial ventures, brand has huge pulling power. Sometimes you will be paying over the odds simply for the reputation of the vendor. This is what you could call the “Apple effect”. If you have a clear sense of the functionality required, the pricing from competitors and your budget and expected ROI, then this should hold in check any risk of paying over the odds.
Buy for long term.
With software, you are not necessarily buying a product but buy into a concept. It’s important to see it as an investment in your business, not an expense, as it should produce efficiencies that will either increase sales or cut existing costs, or fulfil a quality requirement. A good piece of software will grow with your business and last for years to come.