Get it Right the First Time – A Small Business Guide to Software Selection

Buying decisions are the essence of life in the commerce-driven 21st century. From everyday decisions like selecting lunch from a restaurant menu to getting a new car to major company acquisitions, much of our time is spent “buying.”Darbi

Get it Right the First Time - A Small Business Guide to Software Selection 1

And these choices are anything but simple. Each marketer professes to be the sole champion of our consumer rights and pummels us with enticing advertising messages about how their wares are “the best.” Yet, seductive as these messages are, no product or service is quite the same. The difference may be glaring – that of “better vs. worse” or a subtle tradeoff between price, quality, feature set, customer service, or durability.

It is therefore important to keep our wits about & develop a systematic approach to the buying decision. Our view should be broad & farsighted, rather than buying based only on what immediately meets the eye. Hasty decisions leave us with flashy features never used or hefty repair bills of products that came cheap.

A good example of a systematic approach is when you buy a car. A myriad of factors is considered & weighed, which impact the owner for the next decade. This includes brand, performance vs. style, price, safety, finance, mileage, maintenance, resale value & so many other factors.

Selecting Software

In our new “wired” modern reality, the software is no less important than products & services in our everyday lives. Whether it’s a personal email program, chat software for instant connection, collaboration software to organize scattered employees, or an ERP implementation to manage company processes – there’s no surviving without them!

But we’re somewhat more used to buying products & services than software, which is a relatively recent phenomenon. In many ways, selecting software is no different from selecting a product or service. Although intangible, software also addresses a genuine need, on which personal & professional success often depends. Naturally, some of the same purchase factors apply – brand, service, & maintenance costs.

Despite the patronizing obviousness of the above, software selection is a grey zone, an underdeveloped arena. This accounts for the high incidence of “shelfware” – software bought with grand intentions but ended up on dusty shelves. This is because, unlike products & services, it is not so intuitively evident that software has “life cycles” & needs to be “maintained,” “updated,” & “repaired.”

Therefore, purchases are made based on what immediately meets the eye – technical features. This mistake is understandable because technical features are well documented & advertised & easy for the buyer to use as decision criteria. But with this approach, factors that are just as pertinent but not so immediately obvious get left out. Some research & serious thinking is needed to gauge these “hidden” factors.

Key Factors To Consider

1) Company History & Experience

The vendor needs to be sized up before we even go on to consider the software itself. Company background is essential because, unlike traditional companies, software companies are often small & often beyond national boundaries. Since these companies would likely be handling our sensitive data, we need to do a background check. Some related questions are:

How Long Have They Been Around?

As in most cases, we can reasonably assume that record is a good indicator of future performance. Important questions are – How long have they been around? How long have they been in the field? If they’re offering business collaboration software, have they been in this industry long enough? Even if the software is new, do they have experience developing related software?

What is Their Niche?

Does the company know your niche well enough to know your needs? If you are a small/mid-sized business, a company mainly serving the Fortune 500 is not for you. If you work from home, it is unlikely a solution serving large offices will meet your needs.

The Ultimate Testament – The Customer

The ultimate judge of software is its users. To get a true picture, it is important to look at how customers are using the software & what their comments are. For example, does their site include a client’s list or page? Check out what customers say under testimonials, or you could even get in touch with the customers yourself for comments.


There are certain things about the software industry that a buyer should be wary of. First, software startups have shorter life spans than traditional companies & ride high on a success wave but go “pop” when the industry bubble bursts. This was exemplified by the “dot com bust” of 2000. Whether the current spate of “Web 2.0” companies constitutes another expanding bubble that will inevitably burst is debatable. Still, it makes sense to be wary & bet your money on dependable companies with proven track records.

2) Cost

There’s no denying the importance of cost-effectiveness in buying decisions across the board. Yet costs should be seen in a broad perspective because low entry costs may well result in higher total costs and the product’s life.

Features vs. Price

A cost-benefit analysis makes sense, & costs need to be compared with the software’s range of features & functionalities. A document management system may not be the cheapest, but it may allow you also to set up a virtual office. Going for loads of features also constitutes a trap because users never use half of them.

Needs vs. Price

Another question is whether there is an overlap between features & needs at all. Many features may not relate to the needs sought to be addressed. You should clearly define your needs & classify features as “needed features” & “features not needed.” Another possible scheme of classifying features could be “must-have,” “nice to have,” & “future requirements.”

3) Ease of Use/Adoption

An adoption & learning curve is involved with every new software purchase. It needs to be integrated with current systems & software, & the end-users have to be brought up to speed using it. If the software is chunky & too complex, adoption resistance can occur.

Ease of Use

The software should have an intuitive interface, & the use of features should be pretty much self-evident. The shorter the learning curve training a new user, the better. The software should also have the ability to easily fit into the existing systems with which it will have to communicate. For example, a collaboration software might allow you to use some features from your Outlook or even share Outlook data.


To get a measure of “shelfware,” i.e., software purchased but never used, some studies peg the number of shelved content management solutions at 20-25%. At a million dollars per implementation, that’s pretty expensive shelfware! According to another study in the US, 22% of purchased enterprise portal (ERP) licenses are never used.

No doubt, “Shelfware” is a result of ill-thought-out purchase decisions. These studies clearly underline the importance of making an educated purchase. One possible way to protect against shelfware is the new concept of software as a service (SAAS) hosted software. Its developer hosts the software, & buyers have to pay a monthly subscription, which they can opt-out of at any time.


No matter how good a software is, there are bound to be times when one can’t find out how to work a particular feature or a glitch crops up. Some software solutions may require you to hire dedicated support staff of your own, while others may be easy to use, and no specialized staff may be needed, and still, others may offer free support. The cost of hiring support staff needs to be factored into the buying decision.

Provider support may be in the form of live human support or automated help engines. In human help, the quality of solutions, availability & conduct of support executives matter. Support can also be in the form of an extensively documented help engine or extensive help information on the company site. This form of support is often more prompt & efficient than human help.


Training is another form of support that deserves special mention. Free training seminars or their new avatar – webinars (online seminars) – greatly help get up to speed with the software at no extra cost. However, in some cases, the company might offer paid training, which may be essential, & hence this cost needs to be factored into the purchase decision.


Maintenance costs & efforts have a major impact on the performance & adaptability of software, & hence form important criteria of the buying decision. In case the software is hosted at the company’s end, it is of utmost importance that the software is available online at all times or the “uptime.” Uptimes are covered under the “service level agreement” & range from 98% to 99.99%. Therefore, minimum uptime of 99% is what one must look for.

The company’s upkeep is also important. Efforts to constantly improve upon the software underline a commitment to providing quality service. Are bugs fixed promptly & on an ongoing basis? Are they just releasing software & not updating it? One should develop a habit of keeping up with the company newsletter, release notes, or the “what’s new” section on their site. Periodic newsletters & a “what’s new” section are indicative of a dynamic company.

4) Familiarity

The “feel” of the software is another important criterion. The software should keep with the basic layout & navigation schemes we are used to. This makes for a quicker transition.

One good way is to compare with the OS in which we would use the software. Does it have the same basic schema as the OS environment? A software with Mac schema on Windows wouldn’t sit that well. Or we could compare it with other software which we are used to. If you are switching to a low-priced solution from an expensive one, choosing software with a similar small “feel” would make sense. Does it retain most of the main features you are used to?

5) Security

Security is a top consideration because the software company will likely be handling information critical to us – business, financial or personal. We need to be well assured of our data’s security & there are no risks of it being compromised. This needs research, & the extensiveness of which depends on the sensitivity of our data.

What safety features does the provider have?

Encryption, or coding of information, is used by most companies to protect their client’s information integrity. There are different types of encryption, each of which is associated with a different level of security. For example, DAS is, once popular but is now known to have loopholes. SSL 128-bit encryption is associated with top-notch security. Password protection is another important facet. Is the software equipped to withstand manual & automated attempts to hack your password? The ability of the system to detect a hacking attempt & lock up in time is important.