Choosing the right IT solution for your business is not a decision that should be made lightly. The procurement and purchasing process itself can require the allocation of considerable company resources – and that’s in addition to the financial concerns.
It’s essential you know exactly what your requirements are - getting it wrong can be costly, as Hershey’s and Nike famously found out. Problems with its new $112 million ERP software meant the multinational confectionary brand was unable to shift inventory in time for the all-important Halloween season, resulting in over $100 million worth of lost sales. Similar issues resulted in losses of over $100 million for the sportswear giant, in addition to several lawsuits and a 20 percent fall in its stock price.
Clearly, purchasing a new software system isn’t just about meeting a company’s functional requirements, and the value it can deliver to a business. Making the right choice is imperative – right from the start – to save time, money, and frustration in the future.
Before deciding on a particular product or service, all stakeholders – from end-users through to the procurement team – need to be absolutely clear about the problems the business is trying to solve with the purchase. Consideration should be given to the challenges faced by the company on a daily business.
Identifying these needs will allow you to prepare the software requirements specification. It’s important to know, for example, if its features and functions will support the company’s needs as it grows, whether it will seamlessly integrate with existing legacy systems, and how easy it is to configure according to specific needs. Armed with such knowledge, a procurement team will be in a strong position to understand whether the solution is the right one for their business.
Costs and challenges
Software solution providers will often try to lure you in with what, on the surface, appear to be attractive features and add-ons. To determine whether these actually meet your requirements, it’s worth listing the above-mentioned challenges according to priority and urgency, and how – or, indeed, if - the software in question can address these. This should help you focus on its potential business value, rather than being distracted by the shiny extras.
When budgeting for the purchase, consider the size of the business and human capital involved. Implementing new technology can impact the way a business operates, at least for the short term. The cost of the implementation itself should be factored in – both financially and with regard to the time it takes. Training will often be required too, to bring users up to speed with the new system. You also need to consider ongoing maintenance, the need for configuration and add-ons as the solution scales and, of course, the price and frequency of renewing the software. Taking factors such as these into account at the start of the procurement cycle will help avoid unpleasant surprises further down the line.
Once you have an idea of how the solution meets your needs and are confident that it sits within both your CAPEX and OPEX budget, it’s worth taking it for a test drive to get a sense of how it looks and feels. Key users and the technology team associated with the project need to and understand how easy – or otherwise – it will be to implement, integrate, and use.
Ask for case studies and reference calls with clients in the same industry who share similar challenges and that are looking for similar business benefits. Real user stories can often offer up insights that won’t always be found in a company’s sales material. If the vendor has a number of satisfied customers, happy and willing to sing its praises, it can only instill confidence in a potential purchase.
And keep asking questions until you have a complete picture of how that vendor operates. Only once you’re satisfied that you’ve chosen the one that can deliver the most beneficial solution at the best possible price and, ideally, with whom you can enjoy a good supplier relationship, should you finalize the decision.
Choosing the right solution and, by association, the right vendor, is a crucial decision. Don’t simply plump for the top solution on the list. A great deal of consideration needs to take place before purchasing the system that best suits the requirements of your business. Rushing into the decision can prove costly in the long term. But asking the right questions of a provider, and addressing factors such as cost, productivity impact, suitability, and – most importantly – the value its product or service offers, will help ensure you invest wisely.