Why You Should Rethink Making That New Software Purchase

Investing in new software to resolve an issue within businesses is a common but often misguided solution, since many times the required functionality already exists within the business’s software portfolio or is available at some level for free on the Internet.

An investment in software always deserves a lot of thought. Even SaaS (Software as a Service – internet-based software accessed through a browser) software can be expensive for the enterprise, and comparatively more so for the small business. So how can a business determine if and when it’s time to commit to spending the money?

Look at the software you already have. You’d be surprised at the amount of functionality you have in the software you already own/lease that you’re not using (or not using properly). By some estimates, a full 75-80% of the functionality engineered into some software goes unused. The reason for this is that software is usually purchased to solve one immediate problem, and, once solved, the user goes no further in learning about other features/functionality of that software. As a business grows, other needs arise and, since the previous software wasn’t purchased to solve the current problem, little or no thought is given to investigating the unused features of that software. In addition, software is constantly updated, and the functionality you are looking for may have been added since you made the original purchase.

Is there freeware/shareware that will solve your problem? For the larger businesses, enterprise-class open source software is a very real option these days. Almost every type of business productivity tool is available for free online either for a trial period or for an unlimited time for a small group of users – usually with some limitations. Available on most platforms, this type of software is great for small groups looking to “kick the tires” on new functionality within the enterprise without any financial outlay for software acquisition. Cost usually enters in only when customization and support are needed from the software vendor.

Small businesses need to keep in mind that nothing on the internet is really free (you may not pay with cash but you pay with your eyeballs or data instead – banner ads on the screens you’re using, sharing personal and/or business data with the vendor). However, there is a wide range of productivity tools and CRM (Customer Relationship Management) software that you can use with no immediate financial outlay.  Software companies give free access to their software for individuals and small groups with the idea that as your business grows, you’ll pay to expand your use and the functions you need. Using freeware/shareware even for a limited time, gives you the opportunity to evaluate various options and to determine whether you really need to make the investment in time and money. Keep in mind any regulations, like HIPAA, when dealing with personally identifiable information and financial/health records.

Examine the business case and timing of the purchase. Will the purchase, training, and ultimately the use of the software increase sales and/or reduce cost? What are you currently spending (in person hours) to accomplish what the software will automate, and how much less time will it take after implementation? If this functionality is new to the business, what is the expected ROI (return on investment) and when will it be realized? Only once all of those questions have been answered to support the business case does timing come into play. Budget is usually the biggest factor for putting off a purchase, but one also needs to look to see if an imminent major release for this software is scheduled. If so, it may pay to wait until that new release comes out.

The Takeaway:

There are almost as many criteria for selecting software as there are software packages available for use. The key for the business is to leverage what you already have for the new needs of the business, and find adequate free or low-cost solutions online (again keeping in mind security concerns/regulations) that will serve the immediate need. This way you get what you really need without incurring additional cost. As your business continues to grow and you’re in a better financial position or have a bigger budget, you may feel the need to upgrade to pay versions of freeware or transition to software that meets the new needs of your bigger business. In the meantime, you’ll know that you’ve gotten your money’s worth out of the investments you’ve already made.

What existing unused features did you find in the software you already have, before you went out and purchased the same features from another vendor? do you use freeware/shareware? if so, what are you using and how? We’d like to hear it from you.