How not to screw up choosing enterprise software

We’re well used to talking to procurement and IT departments. They’re our friends and they’re candid about the shortfalls in their processes when it comes to software procurement.

So, this is for them – we know it’s pushing at an open door, so to speak. We’ve picked the 4 top challenges we see organisations facing with adopting enterprise software. We look at them in some detail in our white paper. However, here’s a brief look.

1. Selection Mechanism

A lot of procurement processes go wrong right at the beginning with the selection process; it’s often a process that’s great for procurement compliance, but not so great for getting the right enterprise software. Where does it go wrong?

  • Vendors respond positively to almost any RFP/I. They want to sell, right?
  • Innovative solutions or requirements suffer particularly badly in this environment. How is this process meant to work when there is no competitor?
  • The best sales team wins…not necessarily the best software.
  • A ‘beauty pageant’ always happens – no way to assess  functionally complex software.
  • Once selection is made, the procurement process is seen as complete…when in fact, it’s just starting; you may have to live with enterprise software long after the sales team has left.

It’s fair to say that a traditional RFP/I driven procurement process doesn’t guarantee the best results (see http://go.microsoft.com/fwlink/p/?LinkId=208380 for a detailed discussion).

As we often find with Sabisu, sometimes there just is no competition – so the selection process needs to move with the times.

2. Commercial Terms

So, license plus annual maintenance model? Not so great. It drives vendors to inflate costs The vendor ratchets up the cost as they expect to get negotiated down. Thankfully we’re moving to more enlightened times, where software can be licensed on an annual opex/revenue basis.

How much is too much? Well, we think it’s high time that some of the following stopped:

  • Complex pricing models that lack transparency, including paying by the feature…and depending on your market sector
  • A license ‘per seat’, so that every time you roll it out to another person, you get billed
  • Charging by the number of data points to be accessed/recorded, guaranteeing forever spiralling costs. (See manufacturing, process industry and general purpose cloud solutions everywhere.)
  • Typically 15% to 20% of the license cost as an annual maintenance cost just to get support and upgrades.

This is how enterprise software gets a bad name. Software use increases, so cost increases and at a prohibitive level the enterprise starts to ration usage. Counter-productive and probably not what the procurement team envisaged.

Find a licensing model that encourages adoption. At Sabisu we insist customers buy licenses in bundles. No one ever worries about spiralling costs.

3. User Adoption & Training

Most enterprise software is designed with the business in mind, rather than the end user; its focus is security, process/data integrity and control. These are worthy and necessary principles.

A nice side effect for the vendor is that non-intuitive software needs user training. That’s service revenue and who’d not want that?

And you need a critical mass of adopting users, right? Social business, collaboration, business execution software all need a critical mass.

Well, just build better software. Just make it easier to use. It’s hard to do but not impossible.

Ensure you can derive maximum benefit from enterprise software without training. That’s how we designed Sabisu.

4. Risk

Enterprise software is expensive and often delivers marginal benefit. It should be low risk. It should be possible to change or even cancel deployment. However, funding is usually staged, reputations invested and tight contracts drawn up so that mid-way through deployment a change is difficult and painful. What to do?

  1. Make it less expensive to license, deploy and support. Then organisations could make more balanced decisions about the process of implementation.
  2. Don’t front-load spend and schedule. Delays resonate through the plan causing slippage.
  3. Don’t train lots of people at once.
  4. Don’t impact lots of different business processes at once. It’s also high risk in terms of operations as many users need to be trained simultaneously or in quick succession.

There is no reason software has to be like this. Gradual, engaging roll outs are the key, as is software that alleviates resource and funding load on the IT function.

Wouldn’t it be great if benefit could be realized through partial adoption and throughout a gradual, well-managed deployment?

That’s how we built Sabisu.

Thank you.

We hope that’s useful. As always if you have any questions or suggestions, head over to our LinkedIn group and share your thoughts.

 

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