An Enlightened Perspective for Contractor Software Acquisition

By Guest Blogger Chaim Yudkowsky

Choosing construction software today is different than it used to be. Depending on the function for which software is designed, there is an abundance of off-the-shelf choices. Construction accounting software today has become much more customizable and adaptable to a wide variety of business types. More than ever before, developing your own solution makes no sense except for extreme situations that cannot be met by off-the-shelf solutions. And software is generally more reliable than ever before.

Still, despite software evolution and buyer maturity, many small and midsize contractors grapple with defining the best approach to a software acquisition. Have key selection criteria changed as other expectations and value elements have changed? Are there contemporary insights that converge age-old truths with modern-day technologies and system capabilities?

To answer these questions and to help you walk through an acquisition framework, let's review a purchase decision in the context of three categories:
longstanding truths, what is new today, and what should no longer matter.

Longstanding truths:

Decisions are made at moments in time. While construction software projects may take time to implement and complete, the decision to proceed is made based on your circumstances with the best information available from a vendor(s) at a single point in time. As time passes beyond that decision point, the facts sometimes change in ways that can be significant to the success of the project or the appropriateness of the choice made. For example, if after the choice was made a new business unit was acquired, the business software project plan may need to be reevaluated. The result is change orders, workarounds, and sometimes even the need to reconsider proceeding with that solution. Expecting your vendor or your software to deliver 100% in the face of emergent or unknown events is unreasonable.
Vendor references matter. One way of assuring the best possible decision at a moment in time is to perform due diligence. A construction application “working” for a competitor does not indicate that it is a good match for you, that the company that publishes it is financially stable, or that the deployment consultant you are intending to use for the project is any good. You need to spend time researching and understanding vendor and consultant strengths and weaknesses based on publicly available, customer, Internet, and industry analyst perspectives. Therefore, due diligence combined with functionality and feature sets, help support an optimum buying decision.
Reliability of vendor. Most projects have at least two essential vendors involved – a software publisher and a deployment consultant / value added reseller It is necessary to check financial viability and references of both vendors. Are the vendors committed to their customers? Are updates or upgrades smooth? Is support helpful and timely? What type of support prioritization is there?
Security. Security risks that new software may expose you to should be on your radar screen. This is not limited to Sarbanes Oxley, PCI, HIPAA, or other legal compliance. Depending on the system, this may include protecting trade secrets and both substantive and perceived security for your customer.
What happens if things go bad? Critical systems take time to install and may have a use lifetime of many more years than initially planned. Therefore, as you enter a relationship with a software product and vendors, you should do some preplanning of your choices for secondary and tertiary support sources and other plans to keep the system going in case the initial support services are lost.
Standards. As part of the technology evolution, standards have been established for the management of data and user interface protocols. Clearly not every product for every niche industry is fully compliant with all standards, but some sense about how the software does or does not meet current industry standards will be helpful in the decision process. The more you and your vendors can articulate the surrounding ecosystem, the better.
Every project has a risk of failure. Your job as the decision maker is to mitigate and reduce decision risk by planning and evaluating all common risks methodically.
Cross-disciplinary input. Never make the purchase decision unilaterally within an organization. Even the most aware IT, finance, marketing staff will never be able to speak for everyone in their organization. Understandably, organizational dynamics often discourages group decision making, but the input and perspective from all stakeholders is essential to making a great match. In addition, this involvement will usually result in better justification for the new system in terms of return on investment.

What is new today?

Choices. Not only do you often have many more construction accounting software choices to solve a business need, but you will also need to work through the complexity of choice around the platform architecture or subscription model for your software choice. Should the software be hosted on premises or off? Should it be hosted in a shared service environment, often called software as a service (SaaS) or not? Will you be licensing gradually or all at once? Is there downward flexibility in licensing costs as the business goes through cycles of growth and contraction? These decisions effect vendor choice, contract language, and defining how much ownership your organization will be taking for the infrastructure support of your solution. They will influence cost, redundancy, cash flow, security, and elasticity of infrastructure beyond simply the suitability of a solution to your business challenge. Today even simple applications like email have many very robust choices.
Data openness. Affordable data integration opportunities with other systems have been the elusive elixir of IT for decades. Depending on your need, this is usually available. The technology and its associated vernacular is beyond the scope of this article, but this is something you should expect and even demand as part of the pre-purchase due diligence. No system today should be purchased with the expectation that it will be a data silo. Still, do not mistake availability with free. Openness will likely cost consultant fees or in-house resource time to properly leverage.
Business Intelligence. With better data and fewer institutional data silos comes the ability to see the multiple dimensions of your business activity. Every system acquired should be viewed not only in terms of the workflows of capturing and processing transactions, but also in the prism of meaningful mashup and interpretation of data. Therefore, every acquisition should be accompanied with the answer to this question – “how will we get better answers to questions as we make business decisions and look to understand business opportunities?”
Ubiquity of access. Consumerization of technology has encouraged employees to rethink how they work. Apps allow the user to be very mobile and have access on many devices to various kinds of data and applications. New software applications that we acquire should factor in how your users are likely to transform use of functionality over the foreseeable horizon including mobility, type of device, type of Internet connection and size of screen.

What no longer matters

Programming language. In the days that IT professionals decided and oversaw all software decisions, this criterion was a favorite of some technical folks. What many have since come to realize is that this does not matter anymore. Programming skills change as staff changes. The key is data and platform openness which can allow you to stay current on the updates/upgrades a software publisher may issue, while still having extensible programming availability and data access and interchange. My recommendation is to choose best practices over any particular vendor allegiance.
"Off the shelf will not work." There are still rare instances where this is true. In most instances though, this sense of exclusivity is either about misplaced business ego or the personal impact for someone involved in the decision. When a programmer expresses this, be sure to investigate. How you may use a system, how you may integrate it, how you design well thought out customizations or modifications or how you analyze data captured by systems will lead to competitive advantage. It is rare that a newly built off the shelf system will lead to substantive competitive advantage without some custom changes and modifications to suit individual user needs..
“Speed and specs.” Again a very techie conversation of the past. It does not matter. Processor speed is cheap, storage is cheap, bandwidth and even remote access is cheap (aided by virtual desktops platforms and browser based applications). This should not be a starting point or even really a major decision point, just one of the logistical considerations towards the end of the decision. These elements do not enhance business value or application functionality as they one did when each drove cost dramatically.

What should never matter

Buzzwords. Many technology failures or deployments that simply never ended, are a result of decision-making that comes as a result of blind-faith pursuit of a buzzword. A buzzword is simply the contemporary technology darling of the media and often does not even have a universal definition. Some vendors hoping to cash in on “market enthusiasm” for the buzzword, tout the buzzword as being associated with their offering (nowadays dot net). The result can be a thorough mismatch of expectations (different understood definitions of the word), of needs (poor analysis of real business need), and of outcomes. Never buy technology this way.

Summary

In small and midsized business, systems often last for many more years than initially planned. Change is often an overwhelming undertaking. Buying software for contractors therefore requires a comprehensive understanding of function and business direction. With this understanding in mind, you can make the best possible buying decision.

About the Author
Chaim Yudkowsky has been in the forefront of PC business application technology since PCs were first introduced. He can be reached at Yudkowsky@byteofsuccess.com

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