SCC IT Solutions Pvt. Ltd

I am sure, you as buyer and software seller might have also asked/faced this question even before any visit planned to demonstrate the feature and functionality of the software.

Is (cost) this question really the best to be asked in first place as first question?  I do agree that some software categories such as financial accounting (many known products), Word, spreadsheets have made this impression on the unsuspecting customers that relates software as a standard commodity.  It is not true for majority of the software, even the most standard products known to businesses requires lot of customization before these really starts benefiting the organization.

And my views get strengthened in later part of the discussion with the prospects when they admit that they had spent some investment in procuring software earlier but later the investment benefits was not realized due to many reasons including following (only most repeated reasons of making bad software procurement decision are mentioned below).

1. It is not suited to their business environment
2. It was not supported by the software supplier after the selling as a result software got obsolete and not fully utilized or made redundant

But still when they plans or think of buying another purchase of software, they ask the cost first, it is not incorrect to ask cost as cost is one of the most important factor from budgeting and profit booking but it could not be the first one.    Now the question arises, then what should be the questions that should be asked and considered when making decision to adopt/buy software for your organization.

In my view following should be considered in order of occurrence:

1. Points to ask yourself even before calling supplier
   1. Do you have clear list of requirements, for which solution is being sought? (if not it is advisable to make one at least at high level)
   2. Do you foresee resistance in the user community? if yes, plan to mitigate concern and resistance.
   3. Get some decision maker on board to make procurement decision, it is most often the middle management (executioner of vision) that make or break the planned progression to the software therefore it is important to get some nominated in purchasing process, believe me it will be a boon to post buying implementation.
2. Features and Functionality
   1. What is software offering in its feature list? Is it mapping well with your requirements?
   2. Is the software accessible from multiple locations?  Web Enabled or web based?
   3. Is the software scalable in term of increase user base or volume of business?
3. Future Upgrades
   1. What is supplier policy toward future upgrades and enhancements?
   2. What is supplier assurance toward pricing of upgrades and enhancements?
4. Benefit analysis
   1. Count your benefits if you decide to purchase the software?
      1. Count tangible gains ie benefits in measurable currency terms relating to cost reduction, efficiency improvement project etc.
      2. Also count intangible benefits ie benefits that augurs well for the organization name and brand (quality improvement, higher customer satisfaction or higher staff satisfaction etc, improvement in brand and name)
5. Cost of the software
   1. Find out Software pricing mechanism ?(is it based on license, Software offered as service (Saas) , deployment at your site or supplier provided address)
   2. Is it priced per user (license/usage) or per site (multiple locations)?
   3. How much is the cost of customization if required for your business? (do take care of this important question as indicated earlier, even standard products need little bit of tuning and parameter settings to suit and fit the requirements, some even require code /functional changes)
   4. How much effort of your staff would be required to setup the product?
   5. Cost of internet if it is internet based application, then a factor of bandwidth need to be considered long with the software cost.
   6. Any other cost such as hardware (laptop,server or network lines)?
   7. Post implementation, sustain and maintenance cost (AMC cost of hardware/software, Cost of IT staff)?

The author has extensive experience of selling software to small and medium enterprises and the views expressed are purely based on his experience and wisdom that was gained as part of it.  The author is providing consultancy service to many organizations helping them in making software procurement decision.