choose a business tool

How to choose the right software for your business

- Updated August 22, 2019

 

 

The success of how one information system operates in a specific business depends on different factors. There are many types of businesses and information systems. In this article, we make an overview of all the factors to consider, in order to choose the right software for your business.

List the problems you’re trying to solve

solve problem

This is where you look at the big picture to understand your reasons for looking for new software.

You can do this by listing the challenges you’d like the software to help you overcome, and sorting them into the order of priority. If you’re struggling to prioritize them, estimating how much each challenge impacts profitability is a great place to start.

Once you have prioritized your list, choose the top three to keep you focused.

Completing this step will help you stay on track once you get into the detail of looking at different software types. It will provide a frame of reference that will help you to avoid becoming distracted by appealing but irrelevant features and specifications.

Identify the features you need and set the budget

features

Now that you’ve identified what your business needs from your software, it’s time to get specific. This is the stage where you look at software features and specifications.

Sometimes it can be hard to know what features exist, so this is a great time to start researching different types of software. This ‘reverse engineering’ of features of competing products will help you unearth requirements you didn’t know you needed. Much better to discover this now, rather than after purchase.

Note: the aim of this stage is not to compare products yet, just use the information to build a list of features offered by the category as a whole.

Once you have a list of features, sort them into ‘nice-to-haves’ and ‘must-haves’.

Your ‘must-have’ list should be short (maximum of 5) and outline the features that are absolutely necessary for your business. Your ‘nice-to-have’ list can be broader and should be listed in order of importance. We recommend keeping your ‘nice-to-have list’ to 8 or less, for ease of administration.

It’s a good idea to set your budget from the outset. While you won’t have an exact idea of costs until you’ve looked into products in more detail, just setting a ballpark now will give you a rough idea of what you can afford.

Choose Software Functionalities

functionalities

This is a vital, but often-missed step in the process. Gathering functional requirements from your team helps ensure the software is fit-for-purpose and builds end-user buy-in. And projects with strong user buy-in have a much better chance of success once they have been implemented. (No manager likes to see their hard-won new software lying unused in the corner of someone’s desktop).

An easy and effective way to do this is to ask your team to score the features in your ‘nice-to-haves’ and ‘must-have’ lists. You can also give them the opportunity to add any other vital features you may have missed.

Be prepared to adjust your ‘must-have and ‘nice-to-have’ lists once you receive feedback from your team. Don’t forget to check your new list against your business objectives, to make sure you haven’t gone off-piste.

ERP systems: ERP systems are a set of software applications, that support many organizational functions, and unify data in a shared database. They are designed in modules that can be combined to support the unique needs of a company. Aside from supporting functions, ERP systems also include industry best practices, therefore shaping the business model and improving business operations. Read more about ERP here.

Transaction processing systems: These systems help companies process transactions, like customer order processing. They are extremely valuable since most commonly they hold customer credit card information and other sensitive data, which require an additional set of security and privacy mechanisms.

Business Support systems: These are the systems that support different business operations and functions, like human resource management, for example. These systems are job-related. They require a set of extreme security, privacy, and user support, to help employees do their job more effectively. Companies use them for user productivity, knowledge management, and similar purposes.

Reduce your options

choices

Now that you have your ‘must-have’ and ‘nice-to-have’ lists, your team’s needs, and a budget, it’s time to do some research and narrow the field. Here’s how:

  1. Compile a list of products that are in the running.
  2. Research them: using their own product information, but also by referencing industry forums and software comparison sites like Trustradius and Top ten.
  3. Score each product against your ‘must-haves’ list.
  4. Eliminate any that don’t make the grade.
  5. Now repeat the process for your nice-to-have list.

By the end of this process, you should have whittled your list down to two or three products. Now that you have a just a handful of products left to evaluate, it’s time to see them in action.

Don’t Scrimp

Benji Markoff quote

Fortunately, there are plenty of cheap or free options to get started with, from fully free apps like Google Docs to apps with generous free tiers like MailChimp. But you shouldn’t choose tools just because they’re cheap. Switching costs—in dollars and hours—are always a consideration. If you buy something terrible in order to pay less, it’ll just make more work for you down the road. Time is money, so don’t only take the price into consideration. When you scale, you’ll end up switching to the better product anyway. I’d rather pay as much money as I need for something that helps you grow, rather than waste money on a placeholder.”

Consider cost, but pay for value. Software can be expensive, but if it fits a need and helps you do more, it can more than pay for itself over time.

Additional factors

Also, a key to a successful relationship between an information system and a specific business is how companies implement it. Businesses can face many problems, while implementing an application, like:

User training: The IS can be perfect for a specific business. But, many times,  IT professionals overlook user training. Information systems have a different level of complexity. Also, users have a different level of technical knowledge. Business analyst has to take those factors into consideration when planning user training. They have to make sure that users use the system properly, before stating that a system isn’t useful for the business.

Legacy systems: User may be used to the legacy systems of the company. So, they refuse to change their habits. The transition period from the legacy, to the new system, can affect the perception about the system functionality. So, when determining the functionalities of the new system, business analysts have to take a look into the old ones, as well. Those systems can say a lot about what functionalities to implement in the new one, and where users face difficulties.

Interoperability: As a summary, make sure the system works in coordination with the other systems the company uses. Many times, companies make the mistake to purchase a system which isn’t compatible with some crucial component. For example, if you purchase a sales system that cannot operate with your database, you have a problem. So, choose carefully.

Therefore, before building or purchasing information systems, it’s best if each business makes a SWOT analysis to determine which weaknesses should the system improve, or which strengths should the system optimize.

Hopefully, these tips can help you find the software that’s right for your business. However, never forget to…

Focus on Your Business

alex weinberg quote

When launching a company, just start moving. Tools can be distracting and they can wait; your first priority should be building, selling, and promoting your core product. That’s the most important tip we’ve heard from founders.

It’s crucial to limit distraction when you’re getting started—and while software can be a valuable tool, it can also be a distraction. There are so many tools out there, the tricky thing is to manage them all. It’s nice to have tools, but sometimes we have feature creep when we’re using too many things.

Takeaway: Apps are only tools to help you get stuff done. Try to make due with what you have for as long as you have, and only get new apps when you really need them.

Related articles:

Business software: The Make-or-Buy decision

 

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