How to Improve your next Software Purchase

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1 How to Improve your next Software Purchase Sub-title here

2 How to Improve your next Software Purchase One of the big areas of concern for growing businesses is How do we choose the right software and supplier for our business? With more choices than ever in terms of different software packages, system platforms, including The Cloud and types of supplier it isn t surprising that people find it difficult to make accurate assessments and successful selections. National B2B Centre directors, Steve Orriss and Martin King-Turner, both have many years of experience helping businesses large and small through the software selection process and they now offer up some suggestions that should make your next purchase that bit easier. Introduction As people who have worked with business oriented technology throughout our careers we find it disappointing that it is still so difficult for organisations to successfully leverage the power of Information Technology (IT). What makes it worse is that in many cases the problems are not only about making IT work effectively once it has been implemented but also about actually bringing IT into the organisation in the first place. There are a number of problem scenarios that we find occupy our clients. Some organisations, though very aware that they have growth opportunities or operational issues to solve don t connect that awareness with the capability of technology to help. This is frequently because they can t translate the jargon surrounding technology or that they do not have access to an IT expert who can translate it for them. People who are aware of the transformational benefits of a new IT system but who find it hard to express what they want or know who can help them. In this situation the blockage is often because the organisation believes it must state its needs in a format that suits the technologists, but has neither the understanding nor resources to present it in that way. Companies who launch into the purchase of a complex business solution in the same way as they might for a more straightforward product; for example, a single user licence for Microsoft Office. These companies typically identify a solution which claims to solve all their problems and decide to buy it. What happens here is that the scope and business requirements with regard to the people who will use it and the business processes it needs to manage tend to be inadequately defined. This makes it difficult to evaluate potential solutions and suppliers because the selection criteria are too generic. This can lead to different expectations about, for instance, system functionality or project responsibilities between clients and suppliers and so to possible disagreements and disputes.

3 The B2B Centre has had years of involvement in helping companies through these issues or rescuing projects that have floundered. Based on that experience we have put together a series of simple steps which will help you to overcome these problems and achieve the business improvement that we all want. Articulate Your Needs Getting what you really want is a particularly tricky part of the software selection process. Businesses often assume that they can simply ask for a stock control system and expect suppliers to have an off the shelf package that will meet every nuance of how they handle stock. Every business does things in different ways. Document what you need. This process begins with a clear definition of your business goals and identification of your highest level objectives. Next you need to detail the specific functional or business process requirements you need a new application to fulfil in order to meet your goals. Remember to talk to the people who will have to use the new solution. Their co-operation is essential to the ultimate success of the project and asking what they want or need is a key part in securing their buy-in. Now consider how high a priority you would give each requirement. Divide your requirements into Must have, Should have and Could have to help identify the most (and least) critical. Must have requirements are those that are critical to achieve the goals and objectives. Without these the project will fail. These requirements should be documented as specifically as possible. Should have requirements are those will save money or increase revenue but are not absolutely necessary. These requirements should be fully documented but you may be prepared to compromise on some aspects of detail if, for example, an off-the-shelf software package meets the overall requirement in a way that is slightly different from that initially envisaged. Could have requirements are those that would be nice to have if they could be provided at no (or minimal) cost. These requirements will be documented in less detail perhaps in note or bullet-point form. Why go into this level of detail? The more information you provide means that you will have greater control in the supplier negotiation and development process. In a sense you are making your jargon the lingua franca of any supplier conversations and creating a situation where they work to your standards and not the other way round. Considering the benefits and usefulness of every specific thing that you want a new system to do focuses everybody s mind on what s most important. Lots of software projects go over budget because clients don t realise that the request Can we just change the system so that it does this? may require a major software change that costs more money than it is worth. Finally calculating potential savings or earnings is the first step in setting a budget. We have worked with clients who have spent either too much or too little. It is wasteful to spend more than your investment is worth but beware of underinvesting and not taking full advantage of the opportunity. In essence, it isn t worth paying for functionality which doesn t save you time or money. Solution Selection Once you have a clear set of functional requirements you can start the process of identifying suitable applications and suppliers. The two have been deliberately separated because often more than one supplier will sell a specific application but they will differentiate themselves based on their ability to customise the product in a particular way or on the industries they have experience of.

4 Then you will need to engage in the research process. There aren t really any shortcuts from doing things such as: Google searches (e.g. inventory control software for the furniture sector) Talking to trade associations and business contacts Checking out seminars, conferences or exhibitions Supplier Selection You might be left with quite a long list so your next job is to apply your supplier criteria and your must have requirements. The aim is narrowing down to a shortlist of between 3 and 5 companies who you will ask to respond to an RFQ (Request for Quotation). More than 5 will tax your resources because detailed evaluation is very time consuming. In addition to your functional requirements you may want to detail specific requirements you have of suppliers. You may prefer to work with a small, local supplier rather than a national or international business; you may prefer a company which specializes in your application not a supplier of a wide range of expertise and you may want to work with someone who has experience of your specific industry. Remember that you may be working closely with a supplier on a business critical project so characteristics such as specific sector or application experience may be extremely important. An RFQ is an opportunity to present your requirements to the shortlisted suppliers along with your instructions on how they should respond (in terms of providing references, using particular approaches to showing how their solutions will work, such as process maps etc.), and what your assumptions are regarding activities such as training, maintenance, payment schedules etc. Suppliers that offer more than one solution for a particular application can also be useful as they will have the inside knowledge on which of several packages best fits your requirements. On receipt of the responses to your RFQ your challenge is to assess them against your goals, requirements and supplier requirements. As a rule, if it doesn t meet all your Must haves and many of your Should haves, look elsewhere. We strongly advise that you check all supplier references, and if you can, find other references too. Be as rigorous as you can with questioning: it may be as important to know what the process of getting an application working effectively was, and not just if it is working correctly now. We also recommend that suppliers are given an opportunity to demonstrate their solution to you, ideally clearly demonstrating how they will handle the requirements which are special to you. The audience should include anybody whose job it is to use the system. This provides a test for the supplier s ability to work with your people in implementing the system, as making your team feel involved and helping them buy-in to the chosen solution. Final Selection The decision to select the winning supplier can be difficult. It is very likely that your shortlist will present a variety of approaches to meet your requirements, which makes it difficult to draw straight comparisons. It is important to remain patient and to keep seeking clarification on anything you do not understand and ask for evidence for any claim that your supplier makes in terms of capability or results.

5 The best suppliers will try to apply their experience to your requirements and they may include items that you had not considered. Areas such as integration with other systems, providing user documentation or training could be very important to the correct operation of your system. Challenge these items but recognise that they may be worth paying for. Negotiation It is easy to see the negotiation process as simply an opportunity to beat down the price. You should spend at least as much time clarifying and agreeing the wider terms and conditions of the contract as you do thinking about the money. It is useful to refer back to your business goals and consider where you see the company in 18 months or 2 years time. Then evaluate how changes could impact on the contract i.e. the number of end-users, increases in the number of clients, company mergers and acquisitions etc. Will the same terms apply to different legal entities? Are there any limits to the number of transactions, records or users that your licence or service level agreement allows? Be particularly diligent with respect to dates; understand what the definition is of installation, implementation, beta test, go-live, hand-over, completion and renewal dates, both from a meaning and a time perspective. If you need the project to be implemented to a very clear timing plan then be hardnosed about milestone dates, and the penalties for missing them. Conclusion Your business is unique. That means the purchasing process for a new system is always going to be a set of compromises between meeting all of your requirements and suppliers ability to fulfil them within an acceptable set of conditions cost, time, complexity etc. Preparation and patience are important characteristics to maintain throughout the entire process. The greater your preparation in terms of understanding what you want to achieve and how you want your system to work, then the more control you will have in choosing and dealing with suppliers. The more patient you are in examining quotations and contracts, in asking questions and in allowing suppliers to make reasoned suggestions then the more likely you are to get a system that really does make the difference to your business that you are looking for. This article was written for Optimising Business Broadband for Shropshire and Staffordshire by Steve Orriss and Martin King-Turner of the National B2B Centre. You can find others on related subjects at

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