If you’re reading this, you’ve successfully gone through the first of our three-part series: 11 Insider Questions for Selecting Retail Management Software. By now, you may have a shortlist of potential companies you’d like to pursue further. The following step-by-step guide lists 6 key considerations that will help you choose the right software vendor for a fruitful technology partnership.
Step 1: Evaluate the Vendor’s Credentials
When it comes to assessing software vendors, the first order of business is to find out more about the companies themselves. For a general picture of the providers you’re taking a closer look at, evaluate the following key areas:
- Years in business. Companies that have more experience are usually more stable than the newcomers. On the other hand, some of the more seasoned firms may lack in providing the latest functionality such as mobility and business intelligence. The ideal partner has the right mix of solid industry experience and a strong focus on innovation.
- Financial viability. How strong are the vendor’s finances, and what’s their primary source of investment capital? Is the company public or private? Is the vendor likely to have enough capital to keep investing in the business at a healthy rate? What commitments have they made?
- Direction. Buying new software is more than a purchase – it involves forming a strategic partnership, so make sure that the organization you select is one that you’ll want to do business with. Is there a culture fit between the two companies? Take a quick look at their management team and assess if these are people you can see yourself working with. Do your business goals and processes align? Does the company strive to innovate and incorporate the latest functionality into their product? Where do they see themselves in the next five to ten years?
- Partner Network. From software selection all the way through to implementation, you can choose to deal directly with the vendor or go through their system integrator (SI). A well-established vendor will generally have a strong network of global partners. It’s also indicative of the health of the software company, as it shows the network’s commitment to the software editor. Availability of a vendor’s local partners has the following advantages:o Additional expertise and industry knowledge
o Access to more resources
o Proximity of support with preferred language (if required)
Step 2: Find Out Who Their Clients Are
The next step is to find out more about the clients the vendor serves – specifically their similarity to you. For example, has the vendor successfully deployed their solution with similar companies? It makes for a smart decision to partner with a software provider that has plenty of clients like your company, as they will have better expertise in handling comparable:
- supply-chain structure
- number of store locations
- line(s) of business
- level of revenue (i.e. volume of transactions)
- geographies
- languages and currencies
Another advantage is that the software is more likely to be configured to meet your functional needs without requiring custom modifications or new development work, thus avoiding additional costs and risk.
At this point in your evaluation process, you’re probably craving information about how actual customers have been using the vendor’s products to solve real-world business challenges. That’s where case studies come in. This type of content will give you a more detailed look at the vendor’s products in action. The proof is in the pudding, so consult case studies that feature rich detail, concrete numbers, direct quotes and address these concerns:
- Did the customer use the solution to successfully solve business challenges similar to your own?
- Does the solution bring value to the customer?
- Has the provider successfully adapted to the organization’s needs?
Step 3: Determine the Product Lifecycle
Functionality and features are top priority when selecting a new software. However, another important consideration is the product lifecycle. You should assess the following:
- Product Origin. Has the vendor built its products internally or acquired them? Both scenarios have their pros and cons. Acquiring new products allows vendors to expand their offering and gain access to additional expertise, both of which deliver high value quickly and economically. However, it’s not uncommon for product innovation to slow down after acquisition, as the company’s resources are often invested in integrating the new software with their existing suite.
- Functional Developments. The vendor should be committed to developing functional enhancements for the products that are important to you. Many of the core functions of retail management systems are mature – they aren’t likely to change much from year to year. However, other areas are dynamic and demand a steady stream of enhancements. You can expect a faster pace of change in areas like business intelligence, planning, supply chain and enterprise mobility. If you choose the right software vendor, new developments in these areas will increase the value of your retail software long after you buy it. Ask the following: what’s the pace of product releases on an annual basis? Once a year is definitely a must. If product release is stagnant, a good explanation should be given.
- Longevity. Make sure the products you choose will continue to be supported in the long run. With larger vendors, specific products may tend to get discontinued and with smaller vendors, they might come and go. It’s a good idea to ask the vendor to share their product roadmap for the next three to five years to ensure that their direction matches with yours.
Step 4: Gauge Their Support Infrastructure
The importance of helpdesk support can’t be overstated. The software vendor could be an otherwise perfect match, but without a solid support network you won’t be able to maximize your ROI. Support comes in many shapes and sizes, so to determine which model is best for your business, consider the following:
- Do you prefer on-site or online?
- Do you require support 24/7 or in multiple languages? In this case, a larger vendor is more likely to offer these services.
- Do you prefer a call-centre style or one-to-one? If you’re more comfortable with the latter, choosing a smaller vendor will often give you the opportunity to speak with the same few representatives who know you and your business on a personal level.
Service-level agreements (SLAs) for helpdesk support is another important factor to consider. Does the vendor have a proven track record of conforming to SLAs? Does the vendor have clients similar to you, with SLAs that match your minimum performance level expectations? Getting the SLA right is vital to the success of your project, and your vendor should be ready to spend the time to draft them.
To get a better feel for the software vendor’s quality of support, speak with current clients and determine response time, level of expertise and how personalized and effective the service is. If you’re worried about potential biases, you can consult impartial third party publications that have conducted evaluations of numerous vendors’ customer service departments (e.g. CGT Magazine, RIS Software Leaderboard).
Step 5: Assess Their Sales Process
By now, you’ve learned enough about the software vendor to determine if it makes sense to proceed. You may have been able to do all this without even speaking with a sales person (thank you internet!).
Now, it’s time to connect and learn more about the actual sales process. If the vendor suggests kicking off with a discovery call, this is a positive indication as it shows a willingness to get to know your business and mutually determine if it’s a good match. Avoid vendors who claim to have a solution to every challenge – an honest “no” when asked about a particular functionality ensures that neither party wastes their time.
As you move through to the demo stage, ensure that it’s personalized and based on a script so you can simulate a real test drive. It’s the closest approximation to actually having the software installed at your company.
Step 6: Compare Costs Accurately
Differences in technology and licensing models (on-premise, hosted and on the cloud), not to mention various implementation models, are all variables that directly impact your total cost of ownership.
Other costs like upgrades, servers, databases, data migration, integration, employees to support the application, etc. are often overlooked. Given the variety of packages that software vendors provide, it’s necessary to compare apples to apples by breaking them down into their individual categories (e.g. licensing, maintenance, support, hardware platform, professional services, etc.). With so many variables at play, cost comparison can be complex, but a careful analysis of the elements mentioned above will help you pinpoint the right partner.
The choice of the people you work with is as important as the products you select to run your business. Knowing what you don’t want is as important as knowing what you want. So to save yourself future headaches, the best time to fire the wrong vendors is before you hire them.
If you’ve gone through this guide, you’ve picked your new technology partner and are ready to move on to the most important phase in the software purchase journey: the implementation. What do you need to know to make the process as smooth as possible? Find out in our next post.
