Top 4 Pitfalls of Software Selection

Written By: Kyler Cheatham
Date: June 29, 2022

As companies increasingly look to digital transformation to help them compete in the modern economy and improve operational efficiency, dialing in on the best software selection becomes critical. With so many options on the market and so much at stake, the process of selecting the best system to fulfill the business’s unique needs can be complicated and full of potential failure points.

Whether you’re looking to implement an ERP system or a best-of-breed system, it’s important to understand the red flags that pop up along the process to achieve maximum business value from your digital transformation. Let's go over the top four pitfalls we see when working with our clients in the software selection phase of their digital transformation and break down some strategies you can adopt to avoid them.

#1 – Lack of overall strategy and digital roadmap

Selecting or implementing software can be one of the most expensive and resource-heavy transformations that a business goes through. Without a clear digital roadmap of how you’ll utilize a given software, the processes around it, and an implementation plan, you will not receive the maximum business value possible from your investment.

It’s important to understand that a digital strategy is not just an operational strategy. You need to look at the business from a holistic point of view and understand your future state operating model in conjunction with your company culture. What will it take to evolve your processes and operations from what it is today to what it needs to be 5 to 10 years from now? The software should help act as the bridge to get there. The only way to understand which software will be the best fit is to be a visionary and outline a thorough digital roadmap to get from point A to point B.

Going through a digital strategy discovery exercise will also showcase your needs and requirements for a specific software system, which is going to arm your organization with the resource it needs to perform a successful software evaluation process. This information is going to be a playbook for your potential software vendors and will help ensure you select a system that fully meets your needs as an organization.

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#2 – Trusting vendor best practices

During the selection process, many software vendors will come to the table with “proven best practices”. It’s important to have some professional skepticism when evaluating such best practices. Keep in mind that strategies should be unique to the organization that is selecting the software, and what might be a best practice for one organization may not be a nuisance for the next. Falling victim to these best practices or proven solutions will not only cause the organization to lose ownership of the project, but it will also let the ecosystem of the software and the technology lead the selection when ideally this should be led by the business’s unique needs.

There will be multiple “best practices” that meet your needs as a business or industry. In fact, many times you can utilize vendors’ best practices, but it should only be if they align with your strategic goals as a business. Stay true to your own roadmap and digital strategy, no other vendor knows your organization's goals and objectives like you do. Own your project. Simply letting vendors lead the way is going to put your business at risk and your transformation project in jeopardy since you'd ultimately be putting the vendor's need ahead of your own.

#3 – Lack of KPIs or business case measurement

When you start a software selection process, you should be very clear on the different key performance indicators or metrics (KPIs) that you want to measure and see progress on with this new software. As an organization, ask yourself:

  1. Is the software giving us what we need as a unique organization?
  2. Does the cost-benefit realization make sense?

The key will be to unpack what the software is and how will it address your unique needs. This is a simplistic process that can often be watered down with new trending technology or new automation and emerging technologies.

This means that though functions like artificial intelligence, predictive analytics, and machine learning are very important for future state goals, they may not be what your business needs today. Having a deep understanding of the needs of your business, ensuring that the software is achieving those needs and that the spending makes sense for your business case is critical if you want to achieve the maximum business value of the software you’re investing in.

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#4 – Lack of understanding of the total cost of a software selection investment

Understanding the total cost of a software system purchase and implementation is imperative to achieving a successful digital transformation.

The total cost of ownership of a software system extends far beyond the main purchase price. Considerations such as database management, hardware management, implementation resources, customization services, licensing, software-as-a-subscription costs, and other aspects need to be outlined and understood by the organization as well. This is why we help our clients line-item each cost, giving them a holistic view of the investment.

Also, it is recommended to be clear during the contracting phase of software providers and engage legal advice or support, as some vendors can be very good at hiding underlying costs that are not perceived until it is too late.

Prepare before starting your software selection process

A successful software selection is critical to achieving maximum business value in a digital transformation. There are several factors to consider when selecting software and they go beyond a company's current business objectives, overall infrastructure, and budget, so making a poor selection can lead to problems, including increased costs, delays in implementation, and more.

Make sure to understand what a successful software selection looks like for your unique business needs before making any decisions. If you're planning to embark on a software selection process and need expert guidance, please don’t hesitate to reach out to us. Our team is always happy to help you ensure you're on the right path in your digital transformation journey.

Kyler Cheatham
Kyler Cheatham is a digital artist and innovator who is always thinking of new ways to improve the world around her. As the Global Marketing Director at Third Stage Consulting, she uses her creativity and tech-savvyness to help businesses reach their target audiences. Kyler is also a thought leader in the digital marketing space, and she loves sharing her knowledge with others. She is also a mother of two young children, which has given her a unique perspective on balancing work and family life.
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