by Scott Lewis
Software development can be one of the most frustrating processes a company can go through. As business owners we have all been searching for that magical piece of software that can help us run our entire business with one time data entry and full integration between departments while retaining the intellectual knowledge of our business. Now, let’s assume you found that piece of software, be it a CRM package, ERP or a total business management piece of software, what should you expect to pay to have it installed and properly configured?
There are many different schools of thought when it comes to software deployment and how to move these initiatives forward to a successful conclusion. First, before we get to costs and some other key factors, let’s take a look at some of the more common mistakes companies make in the deployment of new software that can drive up the total cost of ownership and result in low adoption rates or ultimately the failure of the software.
Properly evaluating your internal infrastructure is a key element in the deployment of software. Even with the adoption of cloud based SAAS (Software as a Service) applications these can put a strain on your Internet connection. Cloud based applications are going to be dependent on the performance of the internet, so if you are going to use a cloud based SAAS program make sure that you have the internet capacity to support the application.
Proper licensing, there are many different licensing models. You have to know your business and your business objectives to insure that you do not overpay for licensing that you don’t use or as I call them dead licenses. In a 2016 Everest Group survey they state that 61% of IT leaders say that their software purchases are underutilized. Much of this is driven by the fact that you have to have multiple software packages to reach your business objectives such as project management software, scheduling, and time and attendance packages. As a result there are many features and functionality of each package that goes unused in comparison to a full business management piece of software, which would have a higher utilization rate, leading to overall lowers cost.
Another issue that is coming to the surface in today’s computing world is the issue of fragmented data. Many organizations have adopted cloud based programs verse the traditional programs that are loaded on your network. The end result is that now you have data spread over many vendors in many different formats stored within applications that don’t talk to each other. This has created some issues on how to actually retain data and store it for long periods of time, and use the business intelligence that the data can provide to help you grow your business.
Now, what should you expect to pay to have that software installed? There are many factors that can come into play, but as a rule of thumb you should expect to pay about 1 to 1.5 times the cost of the software according to ERP SoftwareBlog. There are many things that can affect the overall costs such as the size of your company, third party integration requirements, and if you are going to pay the vendor to help you install and configure the product or if you are going to do it yourself. The success rate and the satisfaction rate is much higher when you have the vendor or a certified consultant help you with the process of installing the software and getting it configured to meet your needs and to provide initial end user training along with ongoing training. It is worth the money!
Customization of the software is another area that can significantly drive up the cost of your software implementation. Customizations are not unusual when you purchase software, however these customizations based on the complexity and scope can significantly drive up the costs of your implementation. During your implementation process, before you pay to have customization done discuss with your vendor what is already on their development schedule. You may find that if you simply wait, what you need may already be scheduled for development so you will get it in a future release and you won’t have to pay for it.
Third party software integration costs is another area that can drive up your overall costs. Typically third party integration is about 10% to 30% of the overall software costs. This goes back to the fact that historically companies have had to use third party applications to make up for shortcomings in the primary application. Or companies wanted to try to integrate several applications together either through some type of interface or through an import export methodology. If you have third party applications that are going to need to be integrated, make sure that you outline and price these objectives in your internal needs and features analysis.
Software implementations can be frustrating but the overall success of your implementation basically comes down to a couple of factors: how well you plan and the reality check of if you really have time to do the implementation yourself. The success of any software purchase is going to be in the planning process, outlining specifically how you want to work in conjunction with the way the software operates. Training is also going to be a critical factor in the overall success of the software, not just the initial training, but ongoing training because things change business processes change, the software changes and staying on top of those changes can greatly improve the overall satisfaction of your software purchase.
Scott Lewis is the President and CEO of Winning Technologies Group of Companies. Scott has more than 30 years of experience in the technology industry and is a nationally recognized speaker and author on technology subjects. Scott has worked with large and small business to empower them to use technology to improve work processes, increase productivity, and reduce costs. Scott has designed thousands of systems for large, medium and small companies and Winning Technologies goal is to work with companies on the selection, implementation, management and support of technology resources. Learn more about Winning Technologies at www.winningtech.com or call 877-379-8279.
Submitted 5 years 251 days ago