Practical Tips for Purchasing Business Software

When it comes to purchasing, IT organizations often face the same challenges as consumers: There is an enormous amount of products to choose between, as well as an immense number of competing suppliers. What should you buy? And from whom?

Deciding on a certain product and supplier – be it hardware or software – can be very difficult, as we are normally talking big investments and because as a customer you often need to commit yourself for a longer period of time. At the same time, budgets are tight and expectations to the Return on Investment are high.

And as if that was not enough, according to a survey by research institute IfD Allensbach, 9 people on average are part of the decision process when it comes to IT purchase – that is, 9 different people, with different mindsets, preferences and priorities have to come to a decision.

General and Application-Specific Selection Criteria

When it comes to acquiring new software, the decision-makers normally consider various general and application-specific criteria.

General criteria could be acquisition costs, as well as general supplier information about the number of locations or customer installations, or the supplier‘s market position. They are directly connected to investment security and risk management and therefore play an important role in the selection process, because the customer normally commits to a long-term relationship with the supplier when making their decision to buy.

Application-specific criteria are mainly things like functionality, performance and user guidance. They play a definitive role when it comes to deciding whether to go for an out-of-the-box solution with standard functionality or a tailored solution. In the best case (for most companies), the software includes comprehensive standard functionality that can easily be customized individually if necessary.

In order to limit the number of options, decision-makers could consider things like:

Out of the box or tailored? – This decision depends mainly on the company strategy. If you have very special industry-specific requirements and the funds necessary, you would normally favor an individual solution. Whereas standard solutions are less expensive, quicker to deploy and often quite powerful.

Out-of-the-box or Not Out-of-the box? In a free whitepaper, Titus Klijsen, Service Manager and ITSM Expert, is guiding you through the sometimes complicated debate about the pros and cons of out of the box solutions versus flexible tools offering a little more options regarding customization.

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Acquisition, operation and maintenance costs When it comes to costs, there are many different aspects to consider: License fees, for instance, can be financed in different ways; as software, in most cases, can either be bought, rented or leased. Further costs are perhaps incurred by hard- and software acquisitions necessary for the operation of the newly acquired solution. Also project costs for the implementation should be considered in the budget. And lastly, of course, costs will incur in connection with maintaining the new solution – primarily human resources.

Cost-benefit considerations – When it comes to comprehensive cost-benefit considerations, different issues are relevant, like for instance the flexibility of a solution with regard to different application scenarios. An IT Service Management solution that is adequately flexible could, for example, help optimize and automate processes in other department’s outside IT. Equally important is the software’s ability to integrate. Can the software be seamlessly integrated in the existing IT environment? Or could it even render expensive stand-alone solutions ( superfluous ?) and help consolidate the environment?

Cooperation and Customer-Supplier-Relationship – An important issue that is often overlooked during an evaluation process is the cooperation with the supplier. Does he take the necessary time? Has he really understood my pains and requirements? Am I important to him as a customer? Seeing that customer-supplier relationships are normally rather long-term, the decision-maker should take these and similar questions into consideration.

Often, you see orders going to the bigger and more well-known suppliers, probably because that seems the safe choice for the decision-maker. Even when projects go wrong, exceed all budgets, or progress way too slow –  you did after all,  chose one of the big market leaders.

Size is No Guarantee for Success

Just like you tend to have a closer relationship with the local retailer that you know and who is often much more customer-oriented and supportive in his approach, you could have a similar experience when it comes to the purchase of business-critical software.

The size of the supplier in no way guarantees the success of a project: With a bigger supplier, your project is just one of many to draw on the supplier’s resources, so your project perhaps does not always get the attention it requires and is delayed because the supplier has other more pressing projects to take care of. Whereas, the smaller supplier tends to put you first and never treats you as just one customer among many others. Here, customers are considered equal partners whose pains and needs are taken seriously.

It is not always the size of the supplier or their market share that is decisive for the project success. It is much more important that the supplier puts the customer’s (project) success before their  own interests, is attentive to the customer’s questions and requirements, and can always be reached – even after the project is finalized.

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