This is a true story: Susan just upgraded her accounting and customer relationship management software. She investigated several options from various suppliers and settled on an industry-specific program that cost $19,000 up front with a monthly $640 support fee. Why? For Susan, it was a matter of planned growth and greater control. The benefits she expects to realize include coordinated data, marketing programs that are automated and based on complete customer data, proactive analysis tools to plan growth initiatives, immediate cost reduction from reduced need for data entry, and detailed management reports.
Susan expects the advantages from the integrated management software to help propel the business to the next level of growth. When your company growth reaches a stage where integrated software is a real consideration, there are several things to consider before proceeding:
Most important is to have clarity on the business objectives. Software is merely a tool to help implement strategies and reach business goals. Without clear-cut business objectives, software is an expensive toy.
Understand the nuances of your business. As the old axiom goes, “the devil is in the details.” Knowing the idiosyncrasies of your company helps in selecting the appropriate software.
Be clear on the applications for which you want to use the software. Are you looking for marketing solutions, operations solutions, data integration solutions, financial analysis tools, etc.?
When selecting a vendor, be sure that software is its core business. Susan related a past experience with one vendor that sold software as an adjunct line of business. The implementation issues and issues regarding skill level and expertise were rampant.
Applications can be web-based or server-based. Web-based applications are becoming more acceptable, but there are some cautions to consider, particularly in the areas of reliability and security. Get a history of service outages on the hosting company, and ensure that your data is secure and 100 percent accessible and retrievable by you.
When doing due diligence, get “in-person” “real-data” demonstrations of the software. Go to where the software is working with someone in your industry, preferably a location you pick, not a referenced location the vendor provides.
Most software is available in one or more of three options. That is: off the shelf, off the shelf with customization and custom built. When doing modifications, do not modify the source code.
Revisit what you want to accomplish with the data a report would provide. Customizing reports is an expensive and time consuming process. Be clear on the need and value of a customized report before deciding to create it.
Software modules can stand alone or be integrated. The value of integration is economies of scale, reduced redundancies and easy access to data.
Finally, consider the adaptation of your people to new programs. Ideally, you will be automating processes and procedures that are already in place. Developing new processes and procedures to accommodate the software complicates the process and lengthens the implementation timeline and cost.
Considering software is merely a tool, be strategic in your decision to implement a program. If the data collection and analysis can proactively propel the company to new levels of production and efficiency, then it is worth considering.
Ken Cook is managing director of Peer to Peer Advisors, an organization that facilitates business leaders helping each other. You can reach him at kcook@peertopeeradvisors.com.
