Choosing software is as important as the picking the right people

If your people rely on information technology (I.T.), then choosing software is critical. Just as hiring the right people is the first step in building a great organization, choosing the right software is the first step in building a great I.T. system.

The functions and features of software are important, but that’s NOT the place to start. Ask what you should be doing, and why, not what the current system does now. List the important things you should be doing for your customers and to achieve your business goals.

The business functions on that list define your “capabilities”. Major capabilities might include Billing, Warehousing, and Payroll. Many capabilities are best addressed using I.T. and need to be “covered” by some system. Which capabilities on your list are most important to your success? Many vital capabilities such as email, web access, and anti-virus will make that list but are easily “covered” by inexpensive software and come under the heading of “Commodity I.T.” Prioritize the I.T. capabilities that will be expensive or hard to cover or that are most important to your success. These are your “Core Capabilities”.

A software package may cover many core capabilities, but avoid those that try to cover too many. You might find that a combination of packages covers most core capabilities. Unfortunately, combining more than two packages typically makes the process exponentially hard.

“Functions” define what the software does and “features” describe how it does it. For example, the “time card entry” function might include the “entered using smart phones” feature. Which functions are absolutely required? Just because your current software does something doesn’t mean that function is a requirement. Consider only software that meets requirements. List functions and features and decide the relative importance of each. Unless considering a Core Capability, assign a weight of zero to those already addressed by software previously selected.

An important feature of software is how well it fits with your other I.T. Core software defines the environment; but for others, consider whether it runs on the same hardware and how well it integrates with chosen solutions. Software that does not share information with other systems requires double entry and risks giving two different answers to a question such as “what’s that cost?” Integration is important.

You want a high return on investment. R.O.I. is a function of costs and benefits, but also includes the timing of the pay-outs and pay-offs as well as the risks. The benefits of an I.T. solution are calculated by weighing and scoring the requirements, functions, and features. But the cost includes more than price. “Price” can be an up-front licensing fee, an ongoing subscription for support, or both.   Costs such as hardware upgrades, training, and maintenance vary widely. Hidden costs vary such as how much time it takes an employee to complete a transaction, or for data entry, or whether the vendor will be maintaining the system, or the impact of “uptime.” Consider these costs and risks when comparing alternatives.

Know who has authority for the decision regarding the capability under consideration. If the boss is making the call and has already decided, the process is moot. Otherwise, charter a committee (as small as one person) where all stakeholders are represented to make the software recommendation. 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 after each, have individual members fill in the scorecard. After all demos, meet to come up with the collective scores and to make the recommendation.

Choosing software is important and should be done deliberately and methodically. Before upgrading current software, 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.

Here's a PowerPoint presentation that describes a process to use when choosing software: How to Choose Software

Here's an accompanying Excel workbook that shows how you might decide which product is "better" than another for your organization Sample Software Evaluation Scorecard


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