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Secrets of Sofware Success
By Sheldon Needle

1. Stick to the popular packges with a large support network
While there may be hundreds of software packages available in any given market, the fact remains that 10 – 20 % of these systems are doing 80% or more of the business. There are many reasons for this. First, these systems have proven themselves over the years by providing constant improvements and proving to the buying public that their product is stable, supportable and has a following of consultants and resellers who are dedicated to selling and supporting the product. If you ever become dissatisfied with your local vendor (or they go out of business) you want to be able to find someone else to support you.

Does this mean you are foolish to consider anything but the most popular products? Of course not. While there are some nuggets out there, the risk of making a bad choice is greater when you wander off the trail to the lesser known products.

2. Do a real needs assessment before you begin your software search
Most companies wait until a prospective vendor comes in before they really start evaluating their requirements. This approach does not give you enough time to carefully consider priorities and to work out compromises with staff on what must be done. A real needs assessment can involve some or all of the following:

• Strategic plan
• Swot analysis – strengths, weaknesses, opportunities and threats
• Internet positioning statement
• E-commerce planning
• Department by department assessment of current information requirements and opportunities for improvement
• Statement by key management of data requirements
• Needs of operational personnel in the areas of data entry, audit trails, and operational reporting
• Financial reporting needs – current and anticipated

3. Use a professional consultant when necessary.
Just as any professional knows he needs help from experts for IT, taxes, insurance, legal and other technical areas, there are times when a consultant can make a profound difference in the process of choosing software. Utilizing the skills of an independent consultant having a knowledge of the major systems and experience with other clients, is an investment that can repay itself many times over.

4. A corollary to item 3, is to avoid using vendors to do your needs assessment.
Yes, they will usually do it for free but the old axiom “you get what you pay for” applies. Don’t you know that the vendor is biased toward their product and their whole approach will be to make their product look like a fit for you needs? You have not given yourself a fair chance to learn and compare when you use a vendor. There are a few who are truly objective even when they sell a product but they are few and far between. Do you want to risk it? Remember, you get what you pay for.

5 .Qualify your reseller/vendor by having them follow a scripted demo.
Workshops – are you familiar with the term “scripted demo.” If not, you are going to be at the mercy of vendors when they come in to do demos of their product. A scripted demo is really nothing more that a detailed script for the vendor to follow when the demo their product. It should include your actual data including vendor master data, transaction data, product codes, reports and the like. In other words it simulates your actual operational needs.

It does take time prepare a scripted demo and it takes time for the vendor to respond. But keep in mind that this exercise will force you to think through the details of what you need and force the prospective vendor to do some serious preparation for the demo. Some of them will come up with excuses on why they cannot perform the script and some will make a half-hearted attempt. It goes without saying that the vendor who puts the most into scripted demo has prequalified himself as someone you would like to do business with. I know some very capable consultants who will not do business with vendors who refuse to follow a demo script. Here again, a consultant can be very helpful.

6. Pay attention to the little features as well as the big ones.
There is often the tendency to focus on the big items (e.g. financial reports and inventory control – purchase orders integration). But what about some of the little guys like what it takes to find records during a search lookup? Some systems are decidedly better at doing that than others. Another important but often overlooked item is how do you void transactions in the system. Voiding invoices, vendor checks or purchase receipts may be quite easy or a royal pain depending on the product. These are repetitive type transactions that you want to make easy as possible for operating personnel.
The best way to uncover the less visible, but important features is to talk to operating personnel. They are well acquainted with the nuisance items and will love to tell you about them.

7. Use off-line customizations to accomplish complex computations.
Let’s say you have a very complex commission structure which involves unusual calculations. You may be tempted to try to find a system which does it exactly the way you need but it may be much simpler to make an “off-line” custom change. This could, for example, involve exporting essential data to a spreadsheet for the calculations and then printing out the commissions on an external report. It may not be exactly pretty but it could be far less costly to do that than to change program code. In fact, many businesses do have their informal, special purposes applications because it is the least costly and, in the long run, the most effective way to do it.

8. Avoid source code changes whenever possible.
Changes program code means that upgrades may be more difficult to accomplish and that you will be dependent on outside programmers. It is less risk, and usually less costly, to “front end” or “back end” custom changes than to rewrite code. An example of a front-end solution might be a custom invoicing program which lets you enter the data they way you want to and passes the information to the data fields in the accounting system. A back end solution might involve extracting the data for a special report or analysis that cannot be performed with the accounting system itself.

9. Integrate business planning with software selection.
For some firms this will mean nothing more that to pick the brain of the CEO to see what his vision of the business is 3 – 5 years out. It surely will involve issues that are not even being thought about by those who use the software now. It may involved customers, markets, channels, e-commerce and other issues that should be factored in. A simple way to look at planning issues is to start with a one line strategic positioning statement (the number full service mortgage refinancing company in our area). Then build on it by listing 2 – 4 strategies to achieve the overall goal (15% growth in market, increased usage of product, improve reference base). Finally be specific about how what tactics (most financing plans, full advertising program, incentives for salesmen, on-line applications) you will use to accomplish the strategy points. This will help lead you to the right feature requirements in the software.

10. Plan for the internet, plan for the internet, plan for the internet
No business of any size today can afford to ignore the internet, Issues of promotion, advertising, pricing, updating, prospecting, customer service, vendor relations are all potential internet issues. Be sure the software you are buying can efficiently support e-commerce transactions without a lot of custom programming.

11. Believe nothing the salesman says until he proves it.
Have you ever heard the adage that we buy the salesperson and not the product. Well, it is true in many cases. You have to be smart enough to look past the pleasant personality to what substance there is behind it. Most sales specialists are not also product specialists. We have heard of many cases when the salesperson misrepresented his product not so much because he was dishonest, but because he simply did not really know and was never challenged on it. Always make them prove it. That’s what scripted demos are good at!

12. Pay close attention to data conversion issues.
When choosing software users often assume that they can get their data moved from their old system to the new system without much of a problem. Sales people often are quick to confirm this. The fact is that data conversion can be the largest, the most time-consuming, the most demanding phase when implementing a new application. It is often misjudged when planning the switch-over. Know your own existing data. If necessary, study the record layouts. Don’t get blind-sided. Be involved with your vendor in assessing the scope of the task. When well-managed, this can be a cake-walk. On the other hand, it can be the center of a big disaster. About 50% of the time, a custom data conversion program is required.

13. Avoid overbuying
One of the biggest risks today for software buyers is not buying a bad system but one is too sophisticated for them to handle. Buying a prestige brand name product with a lot of pop and sizzle may bring a sense of security but if the product is way beyond your real needs and requires more training and support than a simpler product you could wind up spending double or even triple the amount necessary to meet your needs. The 80-20 rule works. Focus on the 20% of capabilities that will give you the largest payback and don’t worry too much about the rest.

14. Evaluate the report writer very carefully.
An oft stated reason for purchasing new software is better data access or easier maintenance. Well, data access depends heavily on the report writer. You may ask the vendor how you could prepare a particular report. They say “oh, just use our custom report writer for that.” One of the more frequent complaints we hear is that the custom report writer is anything but easy to use. In fact many of them practically require some level of programming skill to use. Spend some time looking at the report writer you will be using and see what it takes to do custom reports. It may be fairly easy or very difficult to use depending on the data you want to look.

If you are planning to buy a database driven system (such as ACCESS) take a good look at the data extraction tools available. Does the application software shield you from have to learn the database program itself or do you have to get down and roll around with files, fields, tables and joins to get at your data?

15. Don’t confuse what you want with what you need.
Many companies get caught up with looking for a lot of advanced features they might see offered by vendors but are really not needed by them. An example might be some advanced cash management abilities or sales management functions that are not going to be used. You pay for these in many ways – the cost of software, training, etc. Take an attitude of compromise with you and know what you where you can bend on to get the best solution for what you truly need to operate your business.

16. Hidden costs
Bringing in a new system brings many costs you may not have considered. These include maintenance of software, purchase of new hardware, conversion costs, staff training, and more. A rule of thumb is that you can expect to spend 1 to 1.5 times the cost of the software itself for the entire installation.

My own experience shows that conversion costs and staff training are the two major costs. Staff training is vital to becoming effective users, and that cost is repaid by greater productivity in a short time. Many companies skimp on training or will try to install and setup the software themselves. This is a recipe for disaster. Don’t become a tight wad at this crucial time

17. Plan, Plan Plan your implementation and allow enough time.
Many users get tripped up when they try to rush their software installation. The fact is that there are few things in life more complex than a new software installation. This is true even for small businesses with relatively simple operations. There are just so many details to keep in mind that it takes time to plan everything. You will need the cooperation of all staff to put this over.

18. Get buy in
Buy in is making sure that key members of your organization support the new system. It is not enough for management to say - ok, we are getting this new whiz bang accounting system that will make you life easier. You must sell it to employees by getting their active participation in the decision making process, otherwise they will not feel that they “own” the system. This fundamental principle of human nature is especially important when bringing in software since almost anyone who is involved in the business operations can sabotage the new system either by avoiding it or misusing its capabilities. Why would anyone do that, you ask? Simply because they were ignored during the decision making process. Ignoring middle management and operational staff during the software selection process is a cardinal sin. They are likely to take out their resentment on management by actively or passively sabotaging the system.

19. Designate company champion
Whatever you do, be sure to identify a company software champion. This is a person whose main goal is to make sure the system goes in and works for everyone. That individual must have good human relations and organizational skills as well as some computer skills. It is also helpful if he or she is familiar with information technology issues so that they are not blown away with technobable spouted by software vendors. Remember the FUD factor – vendors will often spread fear , uncertainty and doubt to tryand get your business. You need to have someone on staff who can see through the maze.

20. Don’t try to automate when the current system is in chaos
Many companies assume that they can solve their software problems simply by bringing in a new system. This will only add to the confusion. Don’t even think about getting a new system until the one you have is working smoothly. This means bank reconciliations are up to date, subledgers ane reconciled with the general ledger, a good beginning trial balance is available, master records are accurate, etc.

About Sheldon Needle
Sheldon Needle CTS President, has been evaluating construction software vendors since 1983. Your free 10-15 minute Smart Shortlist Consult™ with Sheldon is your opportunity to find out latest information about accounting software and get all of your questions answered. Download the Accounting Software Selection Kit now.

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