FACTORS TO CONSIDER WHEN SELECTING APPLICATION PACKAGES

When you’re talking about essential business software, most people automatically think of Microsoft Office. However, this is far from the only option available when it comes to workplace solutions. There are several different software suites that can keep your company running smoothly. Take time to consider all of your options before you settle on a single solution. Evaluating the right factors will give you important insights into which program is really best suited to your needs, present and future.

The aim of this article is to provide practitioners with a grounded set of principles to guide the selection of software packages. By principles, we mean a set of fundamental ideas that summarize important insights in software package acquisition that are not (yet) embedded into the practice of buying software. The principles are interdependent and together they form a whole that is larger than the sum of the parts. Similar to Klein and Myers' argument, the use of all principles is not mandatory, but in each case it must be judged whether, how, and which principles apply to a specific situation.

1. Associated Expenses
You can purchase most office software in one of two ways. The more traditional option is to simply purchase the software suite outright. By doing this you’ll own the software for as long as you want to use it. Another option that’s available with programs like Microsoft Office is to purchase a subscription. With a subscription, you can typically get upgrades to newer versions of the software because they’re released, so you don’t have to purchase new software as you might with another product. However, the subscription is ongoing rather than a one-time expense. The best way to compare expenses between a subscription service and one-time software purchase is to estimate the length of time that you’ll use the software before purchasing a new version. Include the cost of the newer version in your estimates to decide which is the most cost-effective purchase.

2. Ease of Use
Some programs are more intuitive than others. Most business professionals are already versed in Microsoft Office to some extent. If you purchase office software that’s comparable or easier to use, you won’t have many additional training expenses. And your staff can get back into their normal routine more quickly. However, if you opt for a more complex office suite, you’ll need to take time to properly train your employees. Compare the benefits of the program’s enhanced functionality to the expense and challenge associated with teaching your employees to use it. If the long-term benefits of the software’s features outweigh the cost of learning to use it, you have a worthwhile option. While you might need to put a pause on certain aspects of your work flow during the transition, the long-term rewards may be worth it.

3. Software Requirements
Make sure you are aware of any specific hardware or operating system requirements that you’d need to run the software. The majority business software is created to work with a specific operating system, database, and sometimes even a specific hardware platform. Because of this, you need to make sure the software you choose is flexible in regards to operating systems, underlying databases, and hardware platforms. This way you are able to use the software for years to come, when the operating system you’re currently using may be obsolete. You’ll also eliminate the stress that would come along with purchasing software that you’re not even able to use.

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4. Security Elements
Security is one of the biggest concerns for every business owner. You can’t simply trust a new piece of software to be as secure as you need it to be. In fact, many programs outline the need to take additional security measures and learn about things like cloud security to protect your information adequately. For example, Office 365 advises customers not to use its product to transmit or store cardholder data. You will typically need to invest in additional security solutions that are compatible with your office software, which could also be a big cost factor, depending on the security needed. Include this in your considerations.

5. Scalability
Another factor that you may need to consider is if the software has the ability to scale to fit your business’ growing needs. Often times, a business will wait too long before looking for a new software solution, and only begin the search when they’ve completely outgrown their old software. Because of this, outdated software may be holding a business back from growing or taking on more work. Be sure that your new software will be capable of growing with your business to fit your ever-evolving needs as well as staff growth. By choosing software that will grow with you, you’re investing in a product that could last you through the years to come.

6. Functionality
Nearly all companies need programs for word processing and spreadsheets, but you should dig a little deeper into your requirements to adequately determine the best software solution. Do you use your word processor for long documents that need footnotes, endnotes, and annotations, or are you interested more in e-mails or newsletters that are rich in graphics and are easy to scan? Microsoft Word is better for the first, while a program like Publisher is best for the latter.

Take the time to outline your needs and consider all of your options before you invest in a new piece of software or even renew your subscription for a known favorite. Exploring a fresh approach could give your business a much-needed boost.

Bottom Line:
Software packages are replacing custom built software at a fast pace. Yet, there is little available advice on how to evaluate and choose among the offered packages. This article highlights seven principles that are related to selecting and assessing software packages. The principles extend beyond the two obvious but narrow factors of price and immediate features, to include a wider networked and multilateral view of software packages. We promote a view of buying software as a continuous process of constantly trying to match available packages with a base of already installed information systems, while anticipating future organizational needs and advantages in technology. Companies should seek to select the package that fits their situation. However, this is not a unilateral decision, as other companies' actions also contribute to the destiny of the package. Software packages are networked and built around standards that allow (and disallow) connection to other software systems and these considerations must be added to the equation, too. It is therefore necessary to adopt a multilateral approach that asserts the benefits of participation from as many parties as possible in the selection process.

The proposed principles are useful in several ways. First, they form a reference point for IT managers when engaging in software acquisition. Second, without the principles, IT managers would have to spend much time condensing these foundations from available theoretical and empirical sources. Third, the principles help IT managers ensure that vital aspects of the software package acquisition process have not been left out or neglected. Finally, the set of principles is an invitation to formulate a disagreement and start a discussion on what constitutes sound software acquisition practices.

Here is a checklist that IT managers can consider in addition to the usual technical features and price, when evaluating a software package purchase:

• What companies are involved in producing the package?
• How many companies are already using the package?
• How many software companies can configure the package?
• What is the history of the package?
• Is the package built upon open standards?
• How is the fit with other packages?
• What kind of standardization does the package represent?
• Is customization of the package necessary?
• Is there an accessible knowledge base for the implementation and exploitation of the package?
• What are the costs of switching to an alternative package?
• What are the implications of postponing a decision to adopt?
• In what direction is the package evolving? And is our company headed the same way?

The principles can be used prior to making an investment and be used to monitor the vitality of existing packages. To illustrate, when a university built a new campus building it came with a free proprietary facility management system with the new building already encoded. However, using the seven principles, the university management decided that even though the package itself was free of charge, the supporting network around the package was too local and too small for the university to invest in encoding the remainder of its buildings into the package.

Another example of the application of the principles was the company in the field study mentioned earlier. The company used the principles to annually monitor the decision to stay with a package that had been dominant but was losing market share. The question was straightforward: Was the network of users around the software package sufficiently large to provide the package owner with revenue that allowed it to invest in developing the package? For a number of years the answer was positive, but when the network was deemed inadequate, it was decided to switch to the dominant package.17 An illustration of Principle Five and Six is as follows: One large manufacturer had already implemented one ERP system when a vendor offered a competing ERP system at a very competitive price. The manufacturer attempted to switch but after more than a year of attempting to implement the new ERP system the manufacturer had to revert to its old ERP system. The skill set and knowledge base built around the former ERP system in practice inhibited a switch.

Returning to the competitive advantage discussion initiated earlier and playing the devil's advocate, one might argue that if everybody were using the same software packages, where would competitive advantage in the form of differentiation come from? Succinctly put as a paradox, "In the world of software packages, advantage comes from having the same packages as everybody else before they do." Thus, competitive advantage is gained from being able to spot and adopt the packages of the future before they have become the de facto standard packages, and to identify and phase out the packages of the past before they become legacy systems.

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