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When working with software vendors, tech and business leaders must take care to ensure that the partnership is a good fit. While the right vendor can help a company save time and money, the wrong one can lead to lost time, high costs and frustration. But what factors do businesses need to consider when evaluating potential software vendor partners?
To help with this decision, 15 members of Forbes Technology Council share essential steps business leaders should take before closing a deal with a software vendor. Read their insights before you make this important decision.
1. Ensure you share common values.
Healthy vendor relationships are formed at the organizational level. Companies that decide between one vendor versus another based on a personal relationship do it at their peril. The common disconnect between what the sales team promises versus what the implementation team delivers is often the result of organizational misalignment. Ensuring that both companies share common values is key. – Danny Acuna, Danvir Consulting
2. Define your business processes.
Make sure that you have defined your business processes ahead of the vendor selection. Test these processes through a proof of concept, not just a demo. This is the only way to ensure the solution will fit your business needs. – Juliette Rizkallah, SailPoint
3. Consider both your present and future needs.
Businesses must approach software investments as long-term partnerships. Organizations should consider not only the business’ needs today but also three to five years in the future. Buyers need to invest in software platforms that can grow and evolve across a broad range of requirements over time or risk having to license additional software to fill the gaps—leading to more costs. – Tom Shea, OneStream Software
4. Discuss potential problems.
Talk about what can go off track. Most people just talk through the “happy path,” or what happens when everything works. I like to engage in scenarios of what might go wrong and what the communication protocols are so that I can build confidence and expectations before the relationship is locked down. – Alec Elmore, OpenGate Consulting
5. Always perform security due diligence.
One key lesson from the SolarWinds hack is that your network is only as secure as its trusted vendor partners. Cybercriminals look for existing vulnerabilities, and companies are increasingly targeted to gain entry into their partners’ networks. Beyond auditing your own systems and infrastructure, you must also do so for the product and service providers you rely on. – Rodney Joffe, Neustar
6. Understand the potential for waste.
For enterprise software, I have seen the same product configured to optimize flow and in other cases to cause huge waste. It’s very important to make sure the vendor will not let you configure their software to inhibit flow without your understanding and agreeing to the waste. – Laureen Knudsen, Broadcom
7. Look for the hidden cost.
Always remember to find the hidden cost of the work you’ll need to do to make the software work for you. Often, expensive software is purchased because it can do wonders, but it will do wonders only if it is implemented properly, which includes building automation around it, process-related shifts, and education and training. – Vipin Jain, Pensando Systems
8. Find a self-service solution.
Invest in technology that empowers you to start small, gather data immediately and quickly get results at your own pace. For example, an IT department searching for a self-service observability platform should look for one that can show value in the time it takes to make a cappuccino—minutes, not months. – Phil Tee, Moogsoft
9. Carefully review the contract.
Have your legal department look at the contract and make sure everything is in writing and there is clarity on who’s responsible when something unforeseen happens. Unexpected things happen all the time, but having clarity at the start as to who is responsible for covering the costs will make things less painful. – Saryu Nayyar, Gurucul
10. Involve the end-users.
For off-the-shelf solutions, involve on-the-ground users in the selection process. They have a more visceral sense of the pain points in the current process, and they will be better informed and able to identify a vendor who actually solves their problems over a vendor with a more robust feature checklist or impressive-sounding technology. This can also work for bespoke solutions. – Allan Wintersieck, Devetry
11. Ensure the vendor has the right team in place.
The functional must meet the technical. Software vendors must have the right functional team to understand the plan of the client’s project and ensure that the software can scale up based on the vision. The selected software must have the right people behind it to implement the business requirements—otherwise, it’s a disaster in the making. – Bhavna Juneja, Infinity, a Stamford Technology Company
12. Talk to existing customers.
Many software vendors have excellent presentations and smooth salespeople, but what have they actually done to back that up? It’s crucial to talk with existing customers of the software solution to see how the promises and reality align or if you’re buying some beautiful slides that will have painful development attached. – Alexander Hill,Senseye
13. Compare your organization to the vendor’s current customers.
Do some self-reflection while picking up the phone. Call three companies that implemented the software vendor successfully, as well as three that failed. Ask how big they are (customers, revenue, employees) and what the vendor did right and wrong when implementing the system. Then chart where your organization is—your own company, size, personnel and resources could be an issue. – Anthony Presley, Custom Business Solutions
14. Give the software a thorough test drive.
Test drive the software and make the experiment as close to real-life usage as possible. Involve representatives from your various departments or branches to get on-the-spot feedback on what’s most important to them. The ease and speed with which a vendor will make such a test drive possible for you says a lot about that vendor and the maturity of their software solution. – Adi Ekshtain, Amaryllis Payment Solutions
15. Clarify the nonfunctional requirements.
While many are adept and clear about the functional requirements of what software should do, what’s usually missed are the nonfunctional requirements and the assumptions upon which your current implementation or software is based. Having clear nonfunctional requirements and stating assumptions clearly can help save money and time. – Lydia Miller, TATA Consultancy Services