How to choose software

Title: Choosing the right software is as important as the right people

Author: PETER H. MANTOS, Mantos I.T. Consulting, Inc.

Revision: 12/9/2013

Abstract: Selection of information technology (I.T.) systems is critical to business success, yet few companies do so deliberately or methodically.  This paper outlines a simple method that iteratively considers a prioritized list of core capabilities to be covered by integrated software solutions.  Once chosen, successive solutions are selected on the basis of whether they meet requirements and how well they provide the functions needed and the features desired.  One of the most important functions of a software solution to be considered is how well it integrates with previously selected solutions and I.T. platforms.

Additional Resources:

1.   Introduction

Human Resources (H/R) encompass the most important systems in any successful business; the hiring, development, and retention of good people. Almost as critical is selecting, implementing, and maintaining the information technology (I.T.) systems.

When choosing I.T. systems, the most important consideration is the software.  All the other I.T. choices such as “Windows or MAC”, “In-house or Outsourced”, “Desktop or Mobile”, “Ios or Android”, “Server or Cloud”, etc. depend on what software is to be used, by whom, how, and where.  Just as hiring the right people is the first step in successful H/R, choosing the right software is the first step in building a great I.T. system for your organization.  But how do you choose the “right” software?

2.   Consider your capabilities

Many people dive into software selection by considering the functions and features of various packages or reading reviews.  Those are important, but NOT the place to start.  Think first of what your business does, or better yet, what you should be doing.  As a business owner or I.T. manager, the answer might seem obvious, but perhaps that’s only because it’s what you do every day, and have been doing for years.  List the important things you should be doing for your customers and to achieve your business goals.

Given that list, which business functions are required to do them well?  The answer to that question defines the “capabilities” you need.  Many capabilities are best met using I.T.  For example, Billing, Transcription; Warehousing, Delivery, and Payroll might be some of the major capabilities of your organization.  Although, you may need a fleet of trucks, or capital, many capabilities require I.T.

3.   Prioritize

All of your important capabilities need to be “covered” by some system.  Whether that system consists of a shoebox of receipts or a state-of-the-art, cloud-based, mobile application; it has to be done some way and somehow.  If your accounting system uses a shoebox, or your customer relation management system is a rolodex, or your quality management system is a suggestion box, then it’s likely because those capabilities are not very important to your operations and strategic goals.  However, if they are important, and you aren’t using I.T. to help, you’ve likely got some re-thinking to do.

Which capabilities on your list are most important to your success?  Many vital capabilities such as email, web access, telephone service, and anti-virus will make that list for most companies.  But those capabilities are typically “covered” easily by any number of relatively inexpensive software packages and come under the heading of “Commodity I.T.”    Prioritize the I.T. capabilities that will be harder to cover and are most important to your success.

4.   Cover Core Capabilities First – and separately

Think about the core capabilities that are unique to your business or industry.  If you run a law firm, those might include “Document Management”, “Legal Research” and “Time Tracking”.  It’s desirable, but not critical that a particular software package cover many core capabilities.  Beware of those that try to cover too many as you may get a great package to cover “Accounting” which includes “Document Management” for “free”; only to find out that it doesn’t cover it well.

You might find that combination of various packages from different vendors does a great job of covering most or all of your core capabilities.  Unfortunately, the combination of more than two packages typically makes the number of choices large and makes the process of choosing good software exponentially hard.

5.   Requirements, Functions, and Features

When considering various solutions to cover a capability, distinguish between what is absolutely required and what is not.  Just because the software you are using now emails reminders to you does not mean that function is a requirement.  It is entirely proper to list such functions for consideration when weighing one software against another, but your first cut is whether a package meets the requirements or not.

“Functions” define what the software does or does not do and “features” describe how it does it.  For example, “time card entry” might be function considered under the Payroll capability, and “entered using smart phones” might be a feature of that function.

Watch a few demos of some of the most popular packages to get a feel for what features and functions are available.  List requirements, functions, and features and decide the relative importance of each.  Feel free to assign a weight of zero to functions that have already been addressed by other software packages previously selected.

6.    “Plays well with others ” : Integration

One of the most important features of any software package is how well it fits within the ecosystem of I.T. used at your business.  The software that covers your core capabilities ought to define that environment; but for less important capabilities, you need to consider whether it runs on the same hardware and how well it integrates with previously chosen solutions.

If a software package does not share information with other systems, then people end up maintaining the same data in multiple systems.  Not only will you be paying people to do double entry, but you run the risk of having two or more systems giving two or more different answers to basic questions such as “what’s that cost?” or “where is it?”.  Integration with other software should be one important function to consider when choosing software.

7.    Cost does not equal price

When choosing software, you want value.  In financial terms, value is considered in terms of the return, or the benefit, on the investment.  Increasing R.O.I. is obviously a function of paying less and getting more.  But important considerations of R.O.I. also include the timing of the pay-off and the risk of seeing it then.

The benefits of a software solution are calculated by weighing and scoring the requirements, functions, and features.  But the cost of a solution comes in many different guises.  The “price” comes in the form of an up-front licensing fee, or an ongoing subscription for support, or both.   But also keep in mind that there are many other costs such as infrastructure upgrades, training, and maintenance that may vary widely from one package to another.

Also keep in mind hidden costs such as how much time it takes an employee to complete one transaction using one solution versus another, or for data entry, or that missing a customer meeting is less likely using one package than another, or whether the vendor  or your people will be maintaining the system, or the impact of better “uptime.”  Consider these costs when comparing alternatives.

8.    Make the decision

Armed with a list of requirements, functions, and features to cover a particular capability, decide first of all, who has authority for the decision.  A good way to go is to charter a small committee (as small as one person) in which all interests (front-office, back-office, strategic partners, customers, etc.) are represented and give them the task of making the recommendation to a single person who will make the call.  If the boss is making the call and has already decided, skip the committee meeting.

Next, the committee should collectively assign weights to each requirement, function, and feature; decide how each will be scored; and come up with short list of candidate software to be evaluated.  Invite vendors for demonstrations and feel free to give them the scorecard against which they will be judged before they make the pitch.  After the demo, have each member individually fill in the scorecard.  After all demos, meet to come up with the collective scores and to make the recommendation.

9.   Conclusion

Choosing software is important and should be done deliberately and methodically.  Moving to the latest version of the solution in place is usually an improvement, but not necessarily the best solution.  Before upgrading, step back and ask if now is a good time to consider your options.  Next to picking your people, few decisions are more important to a business than the software that they use.

Mantos I.T. Consulting, Inc. ( www.mantos.com ) helps people find and implement I.T. solutions that fit the business.

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About wp_admin

Information technology (I.T.) manager and software developer current in best business practices and personally skilled in legacy, current, and emerging technologies and methodologies. Over twenty years of technical and managerial positions in global corporations and small businesses. Graduate degrees in business management and in computer science. Exceptional communication skills. Dedicated to bringing world-class I.T. and management practices to organizations of all sizes.

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