Whether you are looking for financial, sales force, customer relationship management, or industry-specific software, the process of making the right software selection is the same. There are a number of steps you can take to ensure your final choice is the right one.
There are plenty of stories about dissatisfied business owners who spent too much money on software they thought would solve their business challenges.
The reasons for a less-than-successful software purchase are numerous, but can usually be tracked back to a few key factors. Following a detailed process as you review software will assist you in making a more thorough evaluation and ultimately a choice that best fits your needs. Following are a number of steps to assist you in the selection process.
1. Develop a detailed answer to why a new software solution is necessary and what you expect to gain from a business perspective. That information should be shared with all employees impacted by the change. It’s important to create a receptive environment company-wide early in the process to help later on during the implementation.
2. Perform and document a detailed needs-analysis that looks at all the various features and requirements of your business. Talk to the people who will be using the software on a day-to-day basis. What do they need to make their jobs easier and more efficient? Ask them to identify the tasks that are mundane and time-consuming. Are they able to get information in a timely manner to do their jobs efficiently? You can also create workflow diagrams that will help identify areas needing process flow changes once new software is brought in.
3. Look at your future business needs and growth plans to determine the flexibility required in a software solution. Are there current manual processes that will eventually need to be automated and tied into this new system? Are you looking at salesforce software now but want to eventually tie in their data to the rest of your customer information? Are you looking to eventually expand your business to additional locations, or will you be expanding through acquisition? Asking yourself such questions during this process will help identify the flexibility you may require in a software solution.
4. Research various software companies for a product that addresses your specific needs and falls into an acceptable price range. Your initial research can be accomplished in a variety of ways: the Internet, talking to other businesses in your industry, reviewing trade magazines for software companies advertisements. Once you’ve identified a few possibilities, talk with a representative over the phone to learn about: the product’s fit to your business needs, customer support options, standard pricing information, vendor-provided training, the number of past installations, and years in business. Ask the vendor if he or she is interested in responding to a request for information (RFI), and request a literature pack and demo CD.
5. Create a RFI that basically contains a checklist of features you are looking for in the software. Break that checklist down into logical categories such as: accounting, purchasing, sales orders. Send it to the vendors and request response within a specified period of time. Also request a confirmation of their intent to respond to your RFI.
6. Review the RFIs to narrow your vendor list to two to four companies on which you will do more detailed research. Those vendors should be prepared to demonstrate their products, focusing on features that address your specific needs.
7. Schedule vendor demonstrations and prepare a demo script that each vendor should follow. Indicate in the script exactly what types of transactions you want to see the system handle. Be very specific, but also allow the vendors to show you additional features their systems have. The idea is to see the functionality of the system as it relates to your business, but to also look at the additional features available that may allow you to handle certain processes in a more efficient manner.
8. Conduct a team meeting after the demos to determine one or two vendors that meet a majority of your needs. If a scoring system was used for each vendor demo, then use each person’s score to help you narrow the field to one or two vendors.
9. Ask your top two vendors for at least three references that are similar in size to your company and are relatively new to the software. Your goal is to find out how well their implementation went and how happy they are with the software, the extent of customer support and training services, and how well each company is currently using the software.
Have a number of questions prepared to ask each reference. Ask one of the references if he or she would be open to an onsite visit allowing you to see the software in action. Ask if he or she would select the same vendor again. Honest answers to such questions will give you a good idea of what you can expect from this vendor.
10. Select one vendor that you feel most comfortable with. When you begin negotiations, keep in mind that many vendors will offer discounts based on the number of concurrent users. Many times you can negotiate training, implementation, or consulting services into the overall purchase price.
Make sure you know what the yearly maintenance fee is. This will usually run anywhere from 15% to 20% of the overall software cost and this will need to be built into your annual budget. Sometimes the vendor will waive the maintenance fee for the first 6-12 months.
11. Evaluate the fit. No matter how good the software, there is no software package that will fit all of your needs. Are you prepared to change some of your internal processes to more closely fit the software? If not, you probably won’t be satisfied with the end result unless you want to customize the software, which can be costly and time-consuming.
12. Review your internal processes. Talk to those people who will be affected by the shortcomings of the software. Working through changes with them will help them accept the changes more positively. Use your workflow diagrams from the earlier steps to begin helping people evaluate process flow changes.
13. Develop an implementation plan that looks at a phased approach within your company. This will require patience on everyone’s part in the beginning but having all of the steps defined up front will help people know how and when they will be affected by the new software implementation.
The goal of any software purchase is to reduce costs, improve efficiency, customer service, and data collection within the business. If you follow a detailed process in the selection of the software, you will be able to recognize that goal. Your efforts during the software selection process will lead to greater acceptance and lower frustration levels once the implementation is complete.
Julinda Prekop is president of Pivotal Solutions, LLC, a Menomonee Falls-based business-consulting company specializing in software analysis. You can contact her at 262-391-9502 or by email at julindap@pivotal-solutions.com.
May 24, 2002 Small Business Times, Milwaukee
