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How to select a software vendor

How to select a software vendor

27 February 2023

Sonya Weiser

The world of information technology can be complex and overwhelming, so procurement of software systems is a journey that needs to be navigated wisely.

The steps I use to guide my clients through technology procurement projects are: requirements analysis; vendor selection; software implementation by the vendor; and finally, acceptance testing to close the loop.

In this blog post, I’ll share my recommendations for the vendor selection step, to help you find a software vendor that’s suitable for your business and your technology needs.

Finding a vendor

Before you go searching for a software vendor, it’s very important to understand and document your needs in the requirements analysis step. I won’t go into details about how best to approach that in this blog post, that’s another story for another day!

Once you’re clear about what system your business needs and what is required of the software, it’s time to find and select a vendor.

There’s a huge variety of software vendors out there offering their products and services. Selecting the vendor that’s right for your business requires discipline and effort, just as you would for procurement of any other major purchase.

I recommend you take your time to research who’s out there, ask around your peer group, visit expos, and search broadly. Your industry networks will be the best place to start when looking for software systems that will work for your business, but it is always good to keep an open mind, software functionality can be transferable across industries.

A major part of my role as a technology advisor is to constantly scan the marketplace and research products and services offered by vendors. I don’t just visit technology expos and conferences for fun (although I do love getting my geek on!), there’s a serious purpose to the time and effort I put into this research. But be warned, once you get onto a salesperson’s mailing list, they won’t want to let you go!

Comparing offerings

Comparing software systems and support services offered by vendors can feel like comparing oranges with apples. Each vendor will focus on their selling points, which may not match the list of requirements you’ve prepared before searching for a software vendor.

If you believe a vendor’s offering looks something like what you want, don’t be shy about asking them to respond to questions about your requirements. Any vendor worth working with will be happy to respond to a request for quote, providing responses to questions about each of your requirements for the software system.

You’ll be working closely with the vendor to get the software right for you, so it’s also important to understand the level of expertise and support you’ll need from the vendor.

  1. What is your organisational culture?
    The best relationships with vendors are those that have cultures that align with each other. If your business is large and requires formal governance of procurement and vendors, you’ll need to select a vendor that has a similarly formal culture. If you’re a small, entrepreneurial startup business, you’ll work better with an agile, flexible software vendor.
  2. How much support do you need?
    If your business has an internal technology team, you may be able to select a vendor and software system which you can maintain internally. If you’re a small business that doesn’t have it’s own technology team, you’ll need a vendor that provides great ongoing support once the deal’s been done, the software is in place and the contract is ongoing.
  3. How tech-savvy are your people?
    The people that will be using the software system could have a range of technical skills, from tech-savvy and confident to explore new systems on their own to luddites who hate using technology and need one-on-one training to understand how to get the most out of software systems. The vendor you select may need to provide extensive training to help your people gain the confidence they need with a new software system.

Comparing costs

Software projects are notorious for being a money pit, there are common tales of wheelbarrow loads of cash being pumped into projects that fail. By following my steps for selecting a software vendor you’ll be on the right track to mitigate this risk. The discipline of clear requirements analysis and tight project management are the other necessary elements you’ll need in your toolbox to keep a reign on spending for software projects.

An important step for selecting a software vendor is to compare the costs of their software systems and ongoing support. Comparing costs of systems can again feel like comparing apples to oranges, so the best way to get a quantitative result is to calculate a 5 year total cost of ownership.

Ask software vendors to quote the costs for your business of

  • Recurrent software licences (monthly or annual)
  • Ongoing support fees (monthly or annual)
  • One-off costs of implementing the software, including
    • migrating data from any legacy systems you have
    • training your people to get the most out of the software

Input the costs quoted by each vendor you’re considering into a formula that multiplies ongoing costs over 5 years (optionally indexing these costs for inflation) and add that to the one-off implementation costs.

Once you’ve compared what vendors can offer against your system requirements, total costs and organisational requirements, you should be down to a short list of two or three likely candidates.

Reference checks

Now, a word of caution. Software vendors often have slick sales teams with huge marketing budgets. But once the deal’s been done, the software is in place and the contract is ongoing many vendors don’t follow that up slick sales with good support.

The best way to avoid this problem is the vital step of vendor reference checks. Ask the vendor to provide names and phone numbers of existing customers who are in a business similar to yours. Talking with these customers will reveal what the vendor is really like to work with ongoing, once you get past the sales team. It will also give you an indication of how well the vendor’s culture matches with yours and if the vendor’s support and training will meet your needs.

Even with all the best intentions you may still struggle with vendor support, because the sales team that formed a good relationship with you are off chasing the next deal, while the technical team are left to deal with the details of implementing and supporting the software system. If you’ve ever worked with geeks you’ll understand they require a whole different skillset to understand and communicate with them successfully. In this situation, I highly recommend The Geek Leader’s Handbook, even if you only read the first half of the book, to understand how to form a good relationship and communicate with geeks in software support teams.

Comparing how well the software meets your requirements, whether the vendor is a good match for your business and the costs of each vendor’s offering will give you the confidence to make an informed, wise choice of software vendor.

Are you ready to start the journey?

I hope this blog post has given you some confidence and a place to start when looking for a software vendor that you can work with.

But don’t forget, if you feel overwhelmed, I’m here to help! With over 30 years of experience in the information technology industry, and many years of experience on boards of directors, I am perfectly placed to guide you through what’s best for your business when it comes to selecting vendors.

If you’d like to talk further about anything I’ve written about, get in contact with me today, I’m always happy to meet and have a chat over a coffee.

Further reading

The Geek Leader’s Handbook, Paul Glen and Maria McManus, available at https://www.dymocks.com.au/book/the-geek-leaders-handbook-by-paul-glen-and-maria-mcmanus-9780971246829

Sonya Weiser

Sonya Weiser

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