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Purchase Choice
Purchase choice is the essence of life in the 21century. From the smallest everyday decision to select lunch from a restaurant menu, to buying a new car, to multi million sourcing decisions by global corporations, purchase decisions present themselves at every juncture of our lives.
And these choices are anything but simple. Being pummeled by advertising messages from all directions from marketers enticing buyers to buy their wares, conclusively proving how their product or service is “the best”, is enough to overwhelm anybody.
Seductive as these messages are, and easy as it may be to be swayed by the promises, no product or service is quite the same. The difference may be that of price, quality, feature set, after sales service, durability, or a variety of other factors that make up a product or service.
It is therefore important to retain objectivity and to develop a systematic approach the buying decision. One should weigh what is on offer against what the need is. And take a broad foresighted view, rather than a myopic view based only on immediate features and price. Hasty decisions leave us with flashy features which we never end up using, constantly spending on repairs of products that came cheap, or simply customer service numbers which do nothing but ring.
For example, when buying a car, one considers a myriad of factors which impact the buyer for the next decade. These are company reputation, performance versus style, price, safety, availability and attractiveness of finance, mileage, maintenance costs, etc and only then is an intelligent decision arrived at. Even simpler decision like buying a pair of jogging shoes, or service choice between different cable or internet service providers, involve a weighing of factors.
Selecting Software
In many ways, selecting software, though it doesn’t neatly fit into either category, is no different from selecting a product or service. Although intangible, software like products and services, address a particular need – a need which is very palpable for the buyer. It could be an imaging studio for a photographer, collaborative software to organize traveling employees all over the world, or a word editor to manage personal and professional documents.
Like with selecting products, we need to be clearly aware of the answer to the question – “What need am I looking to address?” A lack of clarity is often what marketers encash by unloading glamorous features onto the buyer.
As with products, every software purchase decision entails a “life cycle” cost. This could be cost of hiring experts to run and maintain the software or simply the cost of lost business or opportunities when the software fails to perform when it matters. If anything, one needs to be more cautious than with products. This is because the “internet startup” is known to be a fleeting phenomenon, and one may be left with software the creator of which has long since disappeared.
It would be right to say that expertise in selecting software is somewhat less developed than expertise in product purchases. Often, the pitfalls of half thought out decisions are encountered only after the purchase has been made. This may be because of the relative recency of softwares, and a lack of precise awareness about what software’s life cycle entails. A common problem is that of an overemphasis on a single factor – most often technical features.
Why is it important to choose the right software?
It is important that we get our software decision right the first time. Once we commit to a software, and integrate it with our systems, opting out may not be easy. Moreover, problems don’t emerge at the beginning, and only reveal themselves gradually, by which time we may have invested too heavily in the software. This would leave us burdened with a below par solution.
The Common Mistake
Most often the culprit for bad software decisions is the lack of a broad enough approach and an emphasis on a single or a few factors. Most often, this single factor is the features or technical specifications of the software.
This mistake is perhaps not so hard to understand, because technicalities and features are well documented and advertised, and right in front of the buyer to analyze and use as decision criteria. But with this approach, there are other factors which are just as pertinent, but not so immediately obvious, which get left out. Some research and serious thinking needs is needed to gauge these “hidden” factors, efforts which many buyers shy away from.
But this effort is essential, and a holistic approach considering all pertinent factors is absolutely necessary if one wants to protect against subsequent efforts, costs and sub optimal performance.
Key Software Purchase Criteria
As mentioned above, technicalities are important but not the sole criteria. A compulsory checklist of questions that must be considered for software purchase is as follows:-
This simple looking checklist goes a long way to separate the pros from the rookies. The purchaser will discover than most solutions are found wanting on one or more of the above counts.
KEY SELECTION CRITERIA IN DETAIL
1) Company History & Experience
How Long Have They Been Around?
Company background is essential because unlike brick and mortar companies, software companies are often small, and even beyond national boundaries. Since often these companies will be handling sensitive data related to your company, one needs to be doubly sure. Law hasn’t quite been able to pin down the particularities of the software industry, and in case of misdemeanor, it would be harder to hold such a company accountable.
One can safely assume that past records are a good indicator of future performance. Therefore it is a must that some time be put in researching the company before one even goes on to consider the software itself.
There are a few things that need to be checked. How long have they been around? Are they registered? How long have they been in the field? For example if they’re offering business communication software, have they been in this industry long enough to know it well? How long have they been in their current business? Even if the software is new, do they have experience developing related softwares?
What is Their Niche?
Another very important factor about the company’s history is the niche it has experience in serving. Does the company know your niche well enough to know your needs? If you are a small to mid sized business, it is unlikely a company serving the Fortune 500 will offer you the best solution. If you work from home, it is unlikely a solution serving large offices will meet your needs.
The Ultimate Testament – The Customer
The ultimate judge of a software are its users. To get a true picture of a software’s workings, it is important to look at how customers are using it and what their comments are. It may entail looking at the site to see if they include a client’s list or page. If the list exists, is extensive and includes recognizable names, that is usually a good sign. Customer testimonials on the site are a good indicator of its performance, and one could also take the initiative of getting in touch with the customers oneself and seeking comments.
Dangers
There are certain things with the software industry that a buyer should be wary of. Because of the lower entry and exit costs, software startups are known to have shorter live spans than traditional companies. Lots of these companies are known to ride high on the success wave when the industry is doing well and go “pop” when the industry bubble bursts. This was well exemplified by the .com bubble burst of 2000, when many software companies disappeared without a trace.
It is debatable whether the current spate of “web 2.0” companies also constitute another expanding buddle which will inevitably burst, but it makes sense that the buyer be wary and bet their money with dependable companies with proven track records.
2) Cost
There’s no denying the importance of cost in buying decisions across the board. Yet the issue of cost should be seen in a broad perspective, because low entry costs may result in higher costs along the product’s life or higher overall costs for the company.
Features vs. Price
A cost benefit analysis makes sense, as opposed to only considering costs. The costs need to be seen in light of the range of features and functionalities the product provides. An online document management system may not be the lowest priced in the market, but it may also allow you the capabilities of setting up a virtual office.
A decision point is whether one wants to keep the budget down and buy a product with most of the main features, or willing to shell out extra money for the entire feature set. As costs go down, one will have to make some compromises on the features, but good research can reveal products which offer a very good cost to feature ratio.
Needs vs. Price
Another question which arises is whether there is an overlap between features and needs at all. Many of the features may not relate to needs which were sought to be addressed at all.
To retain objectivity one can clearly define ones needs, and accordingly classify features as “needed features” and “features not needed”. It is possible that all features may not fit nicely into this scheme as certain features may not be absolutely essential, but would be valuable still. Another possible scheme of classifying features could be “must have”, “nice to have”, and “future requirements” (relating to features that do not serve an immediate need but would in the future)
Armed with this objective information, one would be in a better position to assess various software solutions priced differently & offering different feature sets. A word of caution, purchasers often tend to go for products with loads of features, but never get around to using half of them. This represents wasted expenditure, so it is important to analyze all features in light of needs.
3) Ease of Use/Adoption
A learning and adoption curve is involved with every new software purchase as it needs to be integrated with current systems or other softwares and the end users have to be brought up to speed using it. If the software is chunky and too complex, one can be sure of adoption resistance.
Ease of Use
The software should have an intuitive interface, and use of features should be pretty much self evident. The shorter the learning curve training a new user, the better. Solutions which are too complex or have crudely designed interfaces are major turnoffs for users.
The software should have the ability to easily fit into the existing workflow and IT systems. It may often be necessary for the new software to communicate with established systems. Web-based softwares are a good example of softwares which nicely fit into diverse systems with minimum friction, because they need no elaborate implementation at the customers end and can be run from simply a web browser.
Adoption
To get a measure of “shelfware”, i.e., softwares which are purchased but never used, one just needs to look at the statistics. Some studies peg the number of content management solutions which are shelved at 20-25%. At around a million dollars an implementation, this is really pretty expensive shelfware! According to another study, 22% of purchased ERP licenses are not being used, in U.S.-based companies.
No doubt, “Shelfware” is a result of ill thought to purchase decisions. These studies merely underline the importance of making an educated purchase lest the money is not spent on software that does little more than cooling its heels on an office shelf. One possible way to protect against shelfware is the new concept of “pay as you go” hosted solutions. The software is hosted with company itself, and buyers merely have to pay a monthly subscription rate, which can be opted out in case the customer realizes that the software is not compatible with his business.
Support
No matter how easy to use or intuitive a software is, there are bound to be times when one can’t find out how to work a particular feature or a glitch crops up. Hence quality of support services is very important.
Some software solutions may require you to hire dedicated support staff of your own, while with others company support suffices. The cost of hiring support staff needs to be factored into the buying decision
Provider support may be in the form of human help, i.e., customer care executives who promptly (or not) attend to your problems. Here also the level of quality in terms of helpfulness of solution provided, availability and conduct of support executives matters.
Support can also be in the form of an extensively documented help engine, or extensive help information on the company site, which provides solutions to almost all of the questions you could possibly have. This form of support is often more efficient than the human version.
Training
Training is another form of support which deserves special mention. Some companies offer free training seminars (online and offline) to help customers get up to speed with using a software. This greatly helps in getting started with a new software. In other cases the software might not warrant much specialized training at all. In some cases the company might offer paid training, which might be essential and whose cost needs to be factored into the purchase decision.
Maintenance
Maintenance costs and efforts have a major impact on the performance and adoptability of a software, and hence should form important criteria of the buying decision. In case the software is hosted at the company’s end, it is of utmost importance of the customer that the software be available online at all times, or the “uptime”. Uptimes are covered under the “service level agreement” when you purchase a software and range from 98% to 99.99%. A minimum uptime of 99% is what one must look for.
It is also important how much upkeep a software requires. Will specialized staff need to be hired to maintain and run the software? Or is it low maintenance or maintenance free?
The company’s upkeep is also important. Efforts to constantly improve upon the software underline a commitment to providing you quality service. Are bugs fixed promptly and on an ongoing basis? Are they just releasing a software and not updating it? One should develop a habit of keeping up with the company newsletter, new release notes or the “what’s new” section on their site. Periodic newsletters and a “what’s new” section (which keeps getting updated) are indicative of a dynamic company constantly looking to improve.
4) Familiarity
The “feel” of the software is another important criterion. Us software users are habituated creatures for whom changing a software is as difficult as changing our favorite coffee or newspaper. The software should keep with the basic layout and navigation schemes we are used to. This makes for quicker transition.
One good way is to compare with the OS in which we would use the software. Does it have the same basic schema as the OS environment? A software with Mac schema on Windows wouldn’t sit that well. Another way could be to compare with other softwares which we are used to. If you are switching from an expensive software to a cheaper one, choosing a software with a similar “feel” would make sense. Does it retain most of the main features you are used to? Is it easy to get to those features?
5) Security
Security is a top consideration because in many cases the software company will be handling information critical to us – business, financial or personal data. We need to be triply assured that the sanctity of our data will be preserved and there are no risks of it being lost or falling into wrong hands. This factor requires some research on the client data handling systems and practices of the software provider.
What safety features does the provider have?
Data encryption is the practice followed by warring sides during WW2 to protect the secrecy of their messages. It is now used by most companies follow to protect the integrity of their clients’ information. Encryption is the process of coding information so that it is unreadable by anybody but those who have the key. There are different types of encryption, each of which is associated with a different level of security. DAS is one level, which was previously used extensively but is now known to have vulnerabilities. 128 bit encryption is offered by companies offering top notch security.
Password protection is another important facet of security. What is the strength of the software to withstand manual and automated attempts to hack your password and access your information? The ability of the system to accurately detect a hacking attempt and lock up in time is important.
Data Backup
In extreme cases of system breakdown caused by a facility fire, natural disaster or technical glitch etc, it is important that your data is frequently and adequately backed up and not stored at a single facility. Good company data backup practices ensure that even if your local computer crashes, your data is safe and accessible through the software.
Certain factors are to be considered in backup practices. The first is the frequency of backups. If there is a long gap, there is a possibility of data being lost in intermittent periods. Secondly, what are the security arrangements at the facilities where your data resides? Is it manned and guarded by security personnel? What other systems are in place to protect the data? Is there a good firewall? What is the protection against virus attacks? What procedures are in place for disaster management?
All this requires research, and the extensiveness of the research depends on the sensitivity of the data we will be entrusting the software provider with. A personal mail program does not require the same kind of security as softwares handling banking or business information.
Track Record
As with company background, a little research on the security track record makes sense. Has the company ever been vulnerable to attacks before? What were the losses? How did the company react? How many years has the company had a good record. New companies will most likely have a clean record, but that isn’t necessarily indicative of good security practices.
The Server System
The server system where the sensitive data actually lies is very important. This information will mostly be available in the terms of agreement. Is it state-of-the-art? Is it in step with the latest in the market?
The server infrastructure could be owned by the software provider themselves or outsourced to a dedicated national network providing hosting solutions. Outsourced hosting is a good thing because dedicated hosting companies have extensive expertise and infrastructure in protecting data, often handling critical data of Fortune 500 companies. This frees up the software provider to concentrate on the software itself.
The company might not have an elaborate setup at all, running the software and processing data through computers set up in the garage somewhere acting as servers. This should get your alarm bells ringing! The safety of your data could well depend on a baseball flying through the door.
Conclusion – A Systematic Selection Approach
Now that we have discussed all the relevant factors in detail and have a better perspective of the subject, it is important to develop a systematic approach to analyzing these factors.
What factors are important to me?
Although all of the above factors are relevant, their relative importance may differ from customer to customer. For a company with deep pockets, price comes lower in the list. For a company using a collaboration software to process business information, security is high priority. Again if a solution forms an important part of a company’s business, it is important that it integrates well with existing systems. For dynamic industries like real estate, short training times are important.
A Weighing Scheme to Analyze Software
A simple yet effective approach to analyzing software is attributing weights. All the six factors – features, background, cost, ease-of-use, familiarity and security are attributed weights out of ten according to their relative importance to us. Accordingly, each factor is also attributed weights according to how the software scores on each. Now, the weights on each factor are multiplied and added. The total score is the score of the software. The software with the best score would be a good bet. The approach is illustrated as under.
Know Thy Software
By this step you would have selected a software. But that is still not the end. For all our theorizing and researching, the software still has to pass its toughest test. It would not be wrong to twist the oft used adage to suit software – “the proof of the software lies in its using”.
Most softwares allow you a free trial period. It would be a good idea to seriously use this period to analyze the software. Avoid vendors pushing latest features and versions. They make look pretty, but they are yet unstable and haven’t undergone the test of time. Try to go for versions that have been around a bit and proved their stability.
It is important to stay focused during this testing period because the impact is going to be long lasting. Follow systematic planning. Identify objectives and needs, develop a testing plan, lay out the timelines (1week, 1 month etc), and designate people from different departments to try out different features. Set responsibilities and goals so that testers take their job seriously. This focus will ensure that the software is tested thoroughly in close to real conditions.
THE DECISION!
Don’t hesitate to put the onus onto the company to prove itself. Let the company prove to you the features that seem important to you. For example, if security is of prime importance, ask the company to display how their solution scores high on security. Don’t hesitate to call them if you have questions.
Test their service levels to see if it lives up to their promises. If you submit a ticket, is it promptly responded to? Is a good solution provided? If the problem requires live help, do you get it fast enough? When you call in with a problem, is it a live person or an automated message you converse with?
This is as extensively as you can analyze a software. You’re educated enough to make a choice which will most likely not fail you. You shall surely not be disappointed in your decision.
We hope this article gave you deeper insights into the software selection process. Even if you don’t follow the entire process step by step, a broad understanding of relevant factors will keep you wary, and help you make a more informed and educated choice. Happy computing!
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