The enterprise software market is growing consistently. As per a Statista report, businesses spent a total of $456 billion on enterprise software solutions in 2019. In 2020, spending is expected to surpass $500 billion.
Resource Planning Software (RPS), Supply Chain Management (SCM), Customer Relationship Management (CRM), and Business Intelligence (BI) are some of the most popular software categories.
But while businesses are relying on enterprise software solutions more than ever, it is not always easy for an organization to make the right buying decision. This is especially true in cases where a business is trying to purchase a particular type of software for the first time.
The factors that you should consider for selecting a particular software solution significantly vary based on the type of software you are looking for. But before getting to those factors, it is essential first to get the basics right. The basics are more or less the same irrespective of the type of software you are looking for.
Common Mistakes While Purchasing Enterprise Software & How to Avoid Them
To help you make the right decision, here is a list of some common mistakes that businesses often commit at the time of purchasing enterprise software, along with tips on how you can avoid them.
1. No Clear Buying Objectives
Mistake – A lot of businesses currently looking for a software solution only want one because every other company is using them. But this is never really a good reason to spend a lot of your organization’s resources, including time, efforts, and money. A software solution should be able to help you eliminate the pain points in your organization.
The correct way to purchase a software is first to identify such pain points and then look for a solution that could help you eliminate them almost effortlessly. You should have a clear idea about what your organization wants to achieve with the software.
Without clear objectives, you are likely to end up purchasing something unsuitable, only to realize later that you’ve spent a lot of resources on the product, and it doesn’t add any value to your organization.
Solution – Spend time with people who are linked to the pain point you’ve identified in your organization. For instance, if the accounting department is struggling with a severe problem, discuss the issue with them to get inputs on the type of software you should select.
This will also help you get an idea about the features and functions that you should look out for in the software.
2. Focusing on Software Features and Not Function
Mistake – Companies that create enterprise software solutions very well understand the fact that their potential customers are looking for solutions with advanced features. While there is nothing wrong in purchasing a high-end software, it should never come at the expense of compromising the primary function of the software.
A software solution with lots of bells and whistles but not capable of effectively helping your business or eliminating the pain points cannot be considered a good purchase. This is true whether you are looking for an off-the-shelf product or a customized solution.
A software that effectively performs the primary function that you have purchased it for but with not very impressive features will always be a better choice over a software with a lot of additional features but incapable of performing the primary function that you need.
Solution – Focus more on the function of the software rather than the features that it comes with. For instance, if you are looking for an RPS solution, check out the resource planning and management function of the software.
Additional features like integration options, customization, user access rights, etc. should always be treated as additional features that make the software more powerful. They should never be solely treated as something that could impact your buying decision.
3. Purchasing Customized Enterprise Software
Mistake – Talking about customized solutions, the chances of your business needing one is significantly low unless you have a unique business or strategy. In the majority of the cases, businesses that believe that a customized software solution will offer more significant benefits don’t really need them. A popular off-the-shelf product could work exceptionally well.
Apart from the significant initial investment of creating a custom solution, even the maintenance of such solutions could be costly. It will also need custom upgrades and security measures, which could put a lot of stress on the finances of any business.
Solution – Popular off-the-shelf enterprise software solutions are mostly adequate for most businesses, and they should be preferred over custom solutions. Many off the readymade products nowadays also come with customization features to better meet the needs of different businesses.
But if you still go with a custom software, select a reputed vendor and do discuss the initial as well as future costs of the product.
4. Not Considering the Future Needs of Your Organization
Mistake – In this hyper-competitive world of business, several organizations are abundantly focused on their growth and improving their bottom line. They look for software solutions that can help them with their current needs and deliver quick results. But in the process, they often fail to consider the future needs of the business.
The functions and features that you expect from your RPS, CRM, SCM, or accounting software now can change considerably 2-3 years down the line as your company grows.
Do you really want to purchase something that you’ll have to replace after 2-3 years? Spending the time, resources, and money again on the whole buying and implementing the process is not a wise business practice.
Solution – While it is not always possible to predict the future, you sure can forecast things like additional employees, customer growth, etc. to an extent as per the current functioning of your organization.
So, apart from your current needs, do focus on the expected future of your organization as well at the time of purchasing the software. This will help you make sure that you could continue using the same software for a longer duration.
5. Underestimating the Implementation Time and Cost
Mistake – Apart from the purchase itself, you also need to have realistic goals regarding the implementation of the software. It is very easy to get swayed by claims of your software vendor. In reality, the implementation cost and time are generally higher than what a business assumes at the time of purchasing the software.
This is especially true if you are planning to purchase enterprise software like RPS or CRM that can directly impact the working and bottom line of an organization. To eliminate the implementation complexities, an increasing number of businesses now prefer cloud-based solutions.
As compared to on-premise software, cloud-based solutions are more flexible, scalable, and allow for simpler and faster implementation. In fact, as per a LogicMonitor report, around 83% of the enterprise workload will be in the cloud by 2020. So, this can be a good time for a business to future-proof itself by jumping the cloud bandwagon.
Solution – At the time of estimating the time and cost of implementation, do consider factors like training, data migration, testing, pilot programs, and change management. This will provide you a more accurate estimate.
Also, do consider cloud-based solutions as they are generally easier to implement and cost-efficient.
6. Not Making the Best Use of Trial Period
Mistake – Most popular enterprise software solutions now come with a trial period. For instance, if you are looking for RPS, eResource Scheduler could be an excellent option. The popular resource management solution comes with a free trial of its on-premise version and cloud version.
You should subscribe to the trial run of at least a few popular solutions before deciding. But subscribing to a software trial and making the best use of the available opportunity are two very different things.
Without intervention, you can never just expect your team members to start using the software in the trial period. It is very natural for people to avoid using something new, especially if it is something that they have no experience of using and pushes them outside of their comfort zone.
Moreover, this lackadaisical behaviour often extends to even when the trial period is over and you have purchased the software. So, not using the trial period of the software solution effectively could also impact the long-term goals that you are out to achieve with the purchase.
Solution – You will have to look for a way to monitor how your team members are using the software during the trial period. Only when employees use the software that you will get to know whether a solution is right for your business.
You will have to encourage your team members to make the best use of the trial period as this will not only help the selection, but the experience will also enable your team members to use the software more effectively after the purchase.
7. Outsourcing the Software Purchase
Mistake – It is the responsibility of business leaders and decision-makers to select the right software solution for their business. Outsourcing the purchase to an associate or executive and not involving yourself in the decision increases the chances of wrong selection. And selecting the wrong software could not only have negative impacts now but also on the long-term growth of your business.
As a business leader and decision-maker, you better understand the overall state in which your organization is currently in. Your involvement will provide you a better understanding of the pain points in your organization.
A thorough understanding of your organization and its pain points will also make it easier for you to select a solution that effectively meets your requirements. You will also get a better understanding of the technicalities of the chosen software and will then be able to monitor its effectiveness once it is implemented.
Solution – Rather than outsourcing the buying decision, focus on delegating the task. This means that your team members should know what you are expecting from the software. You can then track whether the members are doing their due diligence in making the right selection.
Never cut yourself out from the purchase process as this move could easily backfire and result in severe long-term consequences, including loss of time, efforts, and resources.
Is Your Organization Ready to Buy an Enterprise Software?
With so many different types of software solutions now available, it is never easy for an organization to select one that best suits their requirements. And with the growing competition across every industrial sector, wrong software purchases could directly impact your operations, brand image, and bottom-line.
But by avoiding the common mistakes discussed in this post, you sure will be better equipped to make the right decisions. Do keep the above-mentioned mistakes in mind if your organization is looking for a software solution, and the chances are that you will end up selecting something that helps you eliminate the pain points and delivers long-term results.
Has your organization recently purchased an enterprise software? What type of software is it? Is the software delivering the expected results? What was the buying process like? Do share your experience in the comments section below.