Opportunity costs – Selecting the right software tool will boost your sales, productivity and reduce costs. The wrong software will not deliver on those results, causing you to lose out on all those money making opportunities.
Business continuity – Implementing a software tool will take time. There could be downtime in your business operations while you make the investment in the tool and implement. You don’t want to have to pay this price more than once.
Unused licenses or services – Sales people are awesome at what they do and their goal is to sell you the vision of where your organization is going. Typically that means they will upsell you in the next pricing discount or add on services. Make sure that you really need those additional licenses now and that the estimate to get there is realistic.
Decrease in customer satisfaction – If the software helps you deliver your goods and services, and it doesn’t deliver on your requirements, the customers will notice a decrease in your performance. Your reputation could take a hit that may not be recoverable.
Re-implementation – this could be one of the worst and is a sum of all the issues listed above! You’ve conducted a software evaluation or software trade study, selected a tool, spent money on the licenses and implementation and tons of time on the roll-out for you and your users. You’ve spent time having the team work in the tool only to find out months down the road that it isn’t going to work. Your career takes a hit and the organization has to go out and do it all over again!
Software can extend the capabilities of humans beyond our imagination. Implementing the right software tool can significantly change the bottom line of an organization. So can implementing the wrong one. By following this six step process to conduct a structured software evaluation or software trade study, you too can select the right software tool to revolutionize your business.
Determine what you need. In project management, we call this the requirements gathering phase. Essentially, this is the wishlist for the features and functions that your new software tool will offer. I have an Excel template that I use to ensure that I’m documenting all the wishlist items. Be sure to consider what you expect from the vendor company as well. Your wishlist should then be categorized into must have and nice to have. This categorization will help during your down select process during the software evaluation or software trade study.
Survey the market. Search, search, search. Wikipedia, Google, Find the Best, Forrester, and trade publications like CIO.com are some of my favorite sources to find the top software products for a particular application. Asking your colleagues or LinkedIn groups is another good way to crowd source recommendations. At this stage, you want to have a pretty large list, depending on what you are looking for in this software evaluation or software trade study, between 5 and 10.
Review each vendor at a high level and update your wishlist again. As you start reviewing the different vendors, you may identify new wishlist items that you didn’t even know were possible! Start to rate the vendors against the wishlist. I usually use a simple rating scale of 0-does not have; 5 – partially delivered; 10 – fully delivered. If you see that a vendor just isn’t going to cut it, don’t worry about completing the entire wishlist – save your time and move on!
Down select to three vendors. You’ll pick the top 3 vendors based on the scoring done in the previous step of the software trade study. You could get fancy and create a weighted scoring model, but generally, I add up the must haves as one score and the nice to haves as another score, and compare them independently and then together to select my final three. Knowing the must have score is important, as you could inadvertently pick a tool that only has nice to haves.
Talk to your top three vendors extensively. This is where the true “study” comes to play in a software evaluation or software trade study. Get a live demonstration, specific total cost of ownership pricing and speak with at least 2 customer references. Search for their online reviews. Once you see one vendor rising to the top, ask if you can test drive the software. You probably won’t have time to do this with all vendors, and it isn’t fair to the lower scoring vendors to waste their time or yours.
Select the software, negotiate a contract, implement and roll out. Sounds easy, right?
Conducting a software evaluation or software trade study can be time consuming, but selecting the wrong one is more costly and time consuming. Executing a structured software evaluation or software trade study like the one outlined above will ensure you’ve conducted your due diligence and made the right choice. The Mandrier Group has extensive experience in conducting software trade studies – contact us today to see how we can help you or signup for your free software evaluation process diagram!
I was recently talking with a friend about outsourcing a project for her small business and how she didn’t think it was feasible for her because of the added expense. I think many entrepreneurs struggle with this concept, so I wanted to share a few quick thoughts on how to find the room in your budget to make the investment in your business. Here are the top five types of tasks that will bring you a return on investment if you choose to outsource:
The task is repetitive in nature and can easily be passed off to someone else. These are mostly administrative – posting blog posts to a website, updating plugins, and entering bills into the accounting system. The tasks are the same each time. Generally they don’t take a lot of your time on an individual basis, but when you add them all together, it can take up to 20% or more of your day. This time is an opportunity cost at the expense of growing your business. Outsource!
The task requires expertise or equipment that you don’t possess and don’t have the time or money to acquire. I recently had a logo developed for my brand. I have no experience in this area, nor do I have the software tools at my disposal to do it right. I tried some online logo development sites, but the results just didn’t feel right or designed for me. So, I outsourced and I love the final product!
Your time could be better spent on higher value tasks. Let’s say you are an amazing copy writer – you’ve built a business writing copy for other people and you are very good at it. Every hour you spend writing copy, you make $100. Or, every hour you spend on business development is the chance to make another $1,000 on your next project. Every hour you spend paying bills is $100 minimum lost opportunity. Outsourcing allows you to focus on building your business – the return on investment is clear.
You just plain don’t like the task! Chances are, if you don’t like the task or you dread doing it, you won’t be putting your best foot forward. You will rush, make mistakes, all which lead to more work down the road. Outsourcing will help you enjoy your business life more and free up your time for that ever so important strategic thinking which leads to more revenue.
Your key employee is out for a temporary period of time. I was recently talking with a colleague who will be going on maternity leave soon. She was worried about how her company would cope without her there to provide top-notch customer service, solve problems, and continue to move the business forward. I suggested outsourcing as a solution – interim executives and interim managers are a key resource for businesses faced with a temporary absence of key employees or temporary projects that require a skill set not currently available on staff and not needed in the long term. The short term investment will ensure that your business does not remain stagnant during the period of absence.
There are many more reasons to outsource, there are books and classes on this topic, so these are just a few ideas on how to justify it. Small businesses need to consider the return on investment they would receive if they were able to make the choice to outsource. Finding room in the budget for one more thing is never easy, but if you commit to spending the amount of time you save on revenue generating activities instead, your investment will pay for itself.