How to Reduce Risk During Enterprise Software Purchase | Meaden & Moore

Sometimes, our client testimonials provide better, more colorful article content than I can write myself. Here is some commentary from a client that M&M Business Solutions is helping with post-assessment improvement work. Specifically, one of the improvements is to purchase and implement a Warehouse Management System (WMS) and, in preparation, we developed the due diligence software demonstration script for the software vendors on behalf of the client.  

I read through the script. I’m glad you guys are on our side.

I agree that this might irritate the vendors, but it’s what needs done.

M&M Business Solutions’ primary role in helping clients with expensive enterprise software purchases is to reduce risk. Risk comes from several angles, including, but not limited to:

• • Software not fulfilling or adhering to the requirements of the business
  • Software requiring extensive customization (and, hence, COST) to meet the requirements of the business

Many software vendors LOVE customizing software because they’re a gift that keeps on giving. First, the software vendors get paid to develop the initial customization for their manufacturer or distributor client. Second, once started down the customization road, manufacturers and distributors often ask for more customization. It’s addictive and, perhaps, part of the reason software companies refer to their buyers as users.

Third, and this is the biggest risk factor, entire swaths of customizations often must be re-done as part of a software package upgrade. For example, if the customization worked in Version 8.1 of the software, five years later when the manufacturer or distributor wants to upgrade to Version 9.3, it finds that the customization doesn’t work or translate to the new version and must be re-written. In other words, the buyer has to re-purchase the customization!

All this said, enterprise software customization cannot and should not be 100% entirely avoided. Manufacturers and distributors often devise unique processes, steps, and ways to serve their customers, and these activities often require automation and embodiment in their enterprise software. Customizations that differentiate a company from its competition are valuable investments; customizations that don’t, but merely fill holes that better “packaged” software could provide are wasteful expenses.

In addition, modern enterprise systems offer easier and less costly customization tools, and these modern tools make customizations more upgradeable from version to version. Screen, query, and report customizations in a modern, post-2010, often will translate from version to version. Nonetheless, enterprise software customization is a risk that manufacturers and distributors should seek to avoid.

One risk mitigation technique is a detailed software demonstration script that forces the software sellers to demonstrate their software according to the buyer’s processes and procedures. Generic, canned, pre-rehearsed demonstrations only provide insight into the general navigation and user interface but not enough toward determining the ability of the software to meet the buyer’s requirements.

In future articles, we’ll discuss other risk mitigation techniques. Contact us today for more information.