BusinessForward

The Seven Deadly Sins of Software Vendor Selection

Posted by BusinessForward Team on September 10th, 2015

By John Huckle, Founder and CEO, BusinessForward

While investing the time and money to select a software vendor might not prompt venal sins like wrath or sloth, it may trigger stress of biblical proportions. Pressure to get results will descend upon you like locusts. But the endeavor to solve your biggest business problems through a new enterprise application selection need not be so dramatic. Technology selection may feel like you are signing your life away, but it need not.

As professionals, we are selective and make business decisions based on an array of factors. We solve problems every day through negotiation, input from peers and analysis of future growth. Understanding the needs of the business is part of our DNA, right? Of course. Unless though, we are talking about an enterprise application selection. The same aggressive, sophisticated people who have risen to lead some of our most prominent companies suddenly behave as if their hair is on fire. The thoughtful chief of human resources suddenly becomes impulsive. The by the books CIO becomes myopically focused on a “go live” date – usually many months in the future. Even the most orderly CFO may miss a few dotted “I”s and crossed “T”s in an effort to get to an end result. This is a mistake. When customers get so fixated on the end result they inevitably rush through IT vendor selection, missing critical steps. But they do not have to blow by multiple exits on the way to their destination.

You understand the steps you need to take: RFP, DEMO, NEGOTIATE and SELECT. Instead of looking at each of those steps as separate actions, think of each piece as a part of selection. In real estate, it is location, location, location. In software vendor relationships, I say it is selection, selection, selection. By thinking differently throughout your selection process, this most critical of investments can be made with confidence.

Kick These Thoughts to the Curb

  1. It’s just a software product.
    You are not just selecting software, you are selecting a long-term relationship with a partner and their tools to enable and enhance your business process. This partner had better be a cultural match and capable of the level of service you’ll need throughout the relationship. This is even more critical today, with SaaS and the cloud, because what you are really buying is service. You already know that service is most impactful to success in your own business, so expect it for yourself.
  2. Put all of your eggs in one basket.
    Even if you have a favorite vendor going into an RFP process, avoid courting only them through the demo and pilot phase. You must have more than one candidate that you can live with if all things being equal your choice falters (maybe price or capability.) It’s the old back pocket-have an NBO at the ready. Because your vendors already know you only have eyes for them, you have to leverage competition in order to negotiate effectively.
  3. Ignore your gut and that voice in your head.
    This is as much a qualitative decision (the art of the deal) that requires listening to gut instincts as much as a quantitative decision (the science of the deal) that involves the obvious factors. You know going through an RFP will include looking at the lowest bid, the percent requirements fit. You have your ROI models and 1-100 things the software needs to do. Just because a vendor looks great on paper doesn’t mean they will give you the best value. What is that voice in your head telling you? Does this vendor give you pause, say about how their low price might actually impact costs? Remember, you get what you pay for.  Sometimes it’s not apples to apples-if one vendor is 50% cheaper than the other one, are they really doing the same job for half the price? You may end up paying the price later for saving money now.
  4. Have opaque objectives.
    While there are many great software companies out there, I am not aware of one that employs a magic crystal ball. You have to be 100% clear about what you want to accomplish and specific about the business-side change expected with the software.
  5. Think that your needs are utterly unique.
    Not being 100% honest with yourself that you are not really that special is one of the hardest things to do. However, it is an absolute must. There are many other businesses in the same industry confronting the same problem. Too often, companies spend a lot of time searching for software only to conclude nothing will work for them. Look at the bigger process relative to your business. Maybe your problem can be solved with more than technology.
  6. Believe that you will be slowed down by involving too many internal stakeholders.
    This is much worse than the tortoise and the hare. This is exposing yourself to totally unnecessary risk. Involving others actually saves time. Think of just three examples. Legal. Who is responsible in the event of a data breach? Procurement. Do you want to play hardball when negotiating the contract and then work with those same people in a partnership? Finance. Are you aware of the viability or any potential mergers or acquisitions taking place that might evaporate your relationship with vendors?
  7. Try to justify every dollar in a business case to make your decision.
    The truth is, no matter the size of the investment or the size of your company, not every benefit can be translated into dollars easily and directly. You have to trust that your new partner will be able to deliver the value you need. You have to have confidence that your new partner will help you be successful.

These seven transgressions are tempting, I know. But you can resist by engaging people who truly understand the nuances and complexities of software vendor selection. I’ve worked with companies across industries and functional areas who testify repeatedly that by simply having the help of a third party expert, they saved significant time and money.  At the very least, it will keep you on the straight and narrow throughout the process.

Confronting these very sins? Shoot me an email at jhuckle@businessforward.com and we can discuss your software selection needs.

Posted By
BusinessForward Team

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