6 Critical Steps for Vetting and Selecting Enterprise Software
Implementing smart enterprise software can revive productivity. In fact, workplace productivity has jumped 84 percent in the last 40 years as a result of digital technology.
And it makes sense: Tools like Box or Bitium enhance workflow and enable employee collaboration. And enterprise software can increase employee mobility, allowing staff to access company data from any place at any time. In turn, this efficiency frees everyone to focus on high-ROI items.
In most cases, your customers end up interacting with the software you choose through shared interfaces or software recommendations so their loyalty is also at stake. It pays to make the right choice from the start.
Here are six steps to take to help you arrive at the best option:
- Define (and agree upon) your business needs. Often, companies buy enterprise software without identifying their exact needs. Purchasing any type of software before fully understanding the problem it solves is never a wise investment. Instead, consult your senior management, gather input, and request unanimous buy-in. This way, your software will address real business needs and won’t be met with resistance during the companywide rollout.
- Vet your software selections. In the words of Adam Miller, CEO of Cornerstone OnDemand: “Carefully vet the balance sheets of the startups that are looking to do business with [you].” Scrutinizing software providers ensures that they provide the resources you need. This also allows you to better predict whether the companies will be around for the foreseeable future. The expense of switching software is extremely high; change providers as infrequently as possible.
- Assess the long-term viability of the software. As you vet your selections, take time to evaluate third-party developers. External support can provide insight into future enhancements. Developers’ input can also be an indicator of the software’s longevity. If something isn’t compatible with other technology or, worse, is on the verge of collapse, don’t invest in it.
- Practice due diligence. Get on the phone to speak to the software companies’ current clients. Talk to clients similar to your organization’s industry and size. If they’ve been happy customers for more than 12 months, that’s a promising sign. Beyond talking to clients, reach out to fellow CIOs to see whether their companies have used a certain product before. It’s one of the easiest and most effective ways to determine whether there’s a better alternative.
- Leverage pilot programs. Most enterprise software companies offer a pilot program that allows potential clients to use limited versions of products for a brief time. Always take advantage of this option until the software proves its value to minimize business disruptions. Pilot programs also provide proof that the software works. If not, the vendor has the opportunity to make alterations and fine-tune the product before it’s ready for general deployment. Further, it gives senior management a chance to get acclimated to the software that will encourage later buy-in.
- Request information on security track records. This is probably the most basic — but often overlooked — step in the selection process. Make sure the company has a proven track record in terms of security. Don’t invest in enterprise software that can’t handle or secure your organization’s quantity of data.
During your assessment, ask about the vendor’s remediation efforts should a breach occur. Know the company’s plan to contain and mitigate a breach. If the developer doesn’t have a policy, it’s probably not a wise option.
Choosing the wrong enterprise software can be disastrous for any company. Switching is costly, especially with the early termination fees often associated with multiyear SaaS agreements (and the time and resources involved in retraining). Ill-fitting software also leads to disruptions and lapses in performance, which in turn promote customer churn.
Take time to understand your needs, get to know your options, and familiarize yourself via hands-on use — you’ll enter the enterprise space a more informed customer, and that alone can make you feel confident about your selection.
About the Author:
TX Zhuo is a managing partner of Karlin Ventures, an L.A.-based venture capital firm that focuses on early-stage enterprise software, e-commerce, and marketplaces. Follow the company on Twitter.
