How to Buy the
Right Software

Practical Help for
Companies of Every Size

Chapter 1: Business Needs Drive Everything

Why are you shopping for software? This isn’t a glib question and it will be harder to answer than you expect. Let’s consider common reasons companies look for new software solutions.

Reasons for New Software

  • Current software: not supported, problematic, expensive, untrustworthy, and/or hated by users
  • No software: paper processes, so lots of chaos, pain, and resource sink
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Insider Tip

Now, any #FOMO reasons for software shopping need to be ignored. Software vendors do a great job selling solutions based on beautiful videos, websites, and stories, but you may or may not actually need the solutions they are selling. Don’t give in to impulse shopping—it has no place in enterprise software evaluations.

Possible Problem Areas That Cost $$

With this in mind, it’s good to consider what the impact of the current situation is—what are the relevant challenges or problems affecting your business?

  • Team costs: inefficiencies, inaccuracies, miscommunications, fumbles, lack of trust, onboarding new team
  • Failure and recovery costs: poor quality, business delivery problems, service and support issues
  • Opportunity-lost costs: what you could have done with better/faster/more accurate processes
  • Brand/customer relationship costs: negative impact to your brand or customer issues that cost contracts or future business

So, why are you shopping for software in the first place? We ask because we’ve seen companies fail at software selection. Failing to get the right solution to solve business challenges often stems from undefined business requirements. Your evaluation process should be based on a solid understanding of your critical and nice-to-have business needs. These business needs should be the guiding compass you use for everything else from requirements definition to vendor research to purchase. Business needs will drive everything starting now through implementation and future upgrades.

Identifying the Business Needs

You might already know your business needs, but if you don’t, this short exercise will help. If you personally know the business need(s), consider doing this exercise with your team, the other stakeholders, and your executive sponsor. Doing this will promote buy-in to the entire process from selection to implementation to go-live.

Consider and answer these fundamental questions:

  1. Why did you start looking for software?

    Current software challenges (and which software) ________________________________

    No software

  2. What are the business processes that need improvement?
  3. Who participates in these processes? Think beyond your team to others impacted as you follow the process from start to finish.
  4. Who owns these processes? Which teams have revenue or cost responsibilities?
  5. What are these problems costing the business right now in these areas? You’ll look more closely at ROI later, but this calculator will help you assess costs of mistakes for product and quality management work based on your inputs.

    Team costs

    Failure and recovery costs

    Opportunity-lost costs

    Brand/customer relationship costs

    Compliance costs

This exercise will allow you to clearly state the business objectives. You want to take this information and get to a business needs statement in the form of:

We must improve W and have better X to accomplish Y and meet Z.

Circulate this “Business Needs” statement until you have input and agreement from all stakeholders.

EXAMPLE

Let’s apply this exercise to an example company that has product development and quality challenges.

 High Tech Electronics Company With 1 Product Launched and 3 More in Development

  1. Why did you start looking for software?
    Current software challenges (and what software is used): We started because engineering change processes were delayed or incomplete. We use spreadsheets, email, shared drives, etc. for this process.
  2. What business processes need improvement? And what are the problems?
    Change control and approval process: by email with multiple teams including factory team in China and design in U.S. Problems include difficult approval feedback process, no historical record of approvals, inability to know which revision is last released.
  3. Who participates in these processes? Think beyond your team as you follow the process from start to finish.
    • Product management teams: software, hardware, electrical
    • Manufacturing ops team including production engineering
    • Quality
    • Supplier chain managers
    • Suppliers and contract manufacturers
  4. Who owns these processes? Which teams have revenue or cost responsibilities?
    • Quality: shared cost responsibility
    • Operations: shared cost responsibility
    • Product management: design delivery responsibility
  5. What are these problems costing the business right now?
    • Team costs: poor change management, supplier confusion, and prototype failure negatively impacted new product development by 12 days
    • Failure and recovery costs: field failure last quarter resulted in rework charges
    • Opportunity-lost costs: delayed product launch resulted in estimated 5% miss in yearly revenue goal
    • Brand/customer relationship costs: field failure resulted in relationship issues with two significant customers; unknown level of impact at this time

Example Business Needs Statement
What are the business needs for this example?

Your first answer might be something like this:

We need a way to control our product information, track change history, and know the latest approved build and the current manufactured build at any time.

Correct, but not at the level of business need yet. If you find your first business needs statement is more about processes and operations, push against that statement to articulate what happens when you do or do not have these needs met.

We must improve the quality of our products and have better product development control to set accurate product launch dates and then meet those commitments.

Gaining Executive Sponsorship

Once you have a business needs statement, your company should prioritize solving these needs. Get executive-level agreement that the business needs statement you are crafting is a priority. We have seen committees select the perfect software, but the buying process was derailed for another project. And, some committees get the money but lack the executive support needed across the teams to make the implementation successful. A clear, executive-backed business reason for the project will help overcome naturally negative feelings about change during implementation and go-live.

Go back to your exercise above and look at the process owners you’ve identified. You may need executive sponsorship from one or more teams that have process ownership and/or revenue responsibility. Most successful software implementations have sponsorship across ALL identified teams that take part in these key processes.

Set your efforts up for success early by socializing the business needs to any executives that are not already involved. While you may not yet get full buy-in, you can set context and update your business needs statement after the stakeholders have supplied input. You may need to quantify the costs identified in the business exercise. Coming up with actual dollar values will require some investigation and calculations. If your business needs are product and quality management related, you can use this tool to help.

Agreement to Shop for Software

Clear business needs drive successful software selection. Your business needs statement should articulate the current costs of not fixing the problem to gain executive sponsorship. Do this and you can not only begin looking for software that will help—but actually buy and implement the software you’ve selected.

Chapter Activities Summary

✓ Complete business needs exercise
✓ Draft a business needs statement
✓ Calculate current costs of business needs to business
✓ Gain executive sponsorship

Next Chapter: Planning Your Software Selection Process