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In science, everything that is observed to happen must have a cause. Although the root cause of most problems with major software purchases can be traced to inadequate requirements, what is the cause of that problem? Why do so many organizations have inadequate requirements? The answer is that few know how to evaluate and select enterprise software. While it looks deceptively easy, in practice it is anything but.
Anybody who has worked with sales & marketing would be familiar with the sales funnel which describes the steps needed to sell a product or service. The software acquisition funnel is similar but views the process from the perspective of the buyer rather than the seller. Note that the volume of each of the four buying phases corresponds to the amount of work in that phase, and shows that most of the work in a successful software selection is in the requirements analysis. This article looks at each part of the funnel.
Software acquisition funnel
Most enterprise software purchases are driven by pain:
These pains drive a growing awareness that the current software has a negative impact on the business. The organization begins quantifying the problem, perhaps estimating the ROI of new software or the cost of doing nothing. This investigation may take as long as a few years, or, if urgent, as little as a few weeks. The output is a decision to replace the software, and this is where the organization enters the software acquisition funnel.
The first phase is to decide what is needed and express this as requirements. It is the most time-consuming part of the process by far, but it is vital to get it right. The root cause of most of the pains encountered when a major software purchase goes wrong can be traced back to an inadequate requirements analysis. A comprehensive requirements analysis contains the following:
The output of this phase is a comprehensive requirements specification that describes what the organization is looking for. It is the standard against which competing software products will be measured.
This phase evaluates how well alternative software candidates meet requirements.
The output of this phase is a list of software products ranked by how well they meet your particular requirements.
This phase focuses on the selection decision and verifying that everything is as expected.
The output of this phase is the purchase of the selected software product.
This phase primes the implementation team for success.
While software evaluation and selection looks deceptively easy, success remains elusive. Follow the process outlined in the software acquisition funnel above to reduce purchase risks. In addition to selecting the best-fit software, this process also builds user buy-in and ensures organizational expectations are aligned with what the selected software delivers. Best of all, you will minimize the pains so prevalent with major software purchases.
Chris Doig graduated from the University of Cape Town, South Africa with a bachelor of electrical engineering degree. While at university, he founded Cirrus Technology to supply information technology products to the corporate market. The focus at Cirrus was helping companies buy the best IT products for their particular needs. Cirrus also developed custom software for the South African 7-Eleven franchise holder and other corporate clients.
In the 1990s, Chris immigrated to the United States and worked at several companies in technical and IT management roles: Seagate, Biogen, Netflix, Boeing, Bechtel SAIC, Discovery Communications and several startups. At all of these companies he repeatedly saw software being purchased with an immature selection process. Invariably this software would take longer to implement than planned and cost more than budgeted. To make matters worse, the software seldom met expectations.
Having struggled with software selection himself, Chris founded Wayferry, a consulting company that helps organizations acquire enterprise software. He is also the author of Rethinking Enterprise Software Selection: Stop buying square pegs for round holes. While ERP projects account for much of Wayferry's work, other types of enterprise software acquisitions include CRM, HRIS, help desk, call center software, clinical trials management systems and so on. For Chris, the ultimate satisfaction is when clients report meeting or even exceeding expectations with their new software.
The opinions expressed in this blog are those of Chris Doig and do not necessarily represent those of IDG Communications Inc. or its parent, subsidiary or affiliated companies.
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