When it comes to buying software as a service, bad decisions can quickly become expensive. You should avoid these errors when selecting SaaS applications.
Bad software can affect productivity and may prevent companies from achieving important goals. It is difficult for companies to identify the right software-as-a-service offer for their specific requirements: there are thousands of SaaS applications from all possible areas on the market.
In the following, we have compiled four of the most common mistakes that companies make when purchasing software for you. Of course, we will also tell you how you can avoid the pitfalls.
1. “Why” is not taken into account
According to Steve Cabello, managing director at the consulting firm Protiviti, companies should first of all ask themselves the question of why they are considering buying a particular software: “My first two questions to my customers are: ‘Why are you doing this?’ and ‘What are your strategic motives?‘ – the answers to these questions are important, because they can influence the way in which one approaches the assessment. Sometimes it’s about cost savings, sometimes it’s about optimizing operational efficiency.
IDC analyst Frank Della Rosa agrees and recommends that companies set both operational and ambitious goals: “Operational drivers are very tactical – for example, problems that have a negative impact on business and need to be fixed immediately. The corresponding data may be scattered throughout the enterprise, and the organization will not be able to get any benefit from it – this is an operational driver.“
Ambitious drivers, on the other hand, are usually linked to digital transformation, explains the research expert: “It’s about wondering where the company should be in one to two years. Maybe there are ideas for new business models or new sources of income. A good way of thinking in this context is the question: ‘How can the value proposition for customers be rethought?’“
All too often, according to the analyst, companies make these decisions hastily and with too much focus on operational aspects. However, companies would also have to take the time to include larger and more comprehensive efforts in these considerations in order to be able to open up new levels of efficiency and create optimized customer and user experiences.
2. Not understanding critical requirements
“Instead of dealing with lists of features in the selection phase, companies should take care of really understanding their own critical requirements,” recommends Christina Kearney, chief marketing officer at the software Reviews platform.
According to the manager, it is essential for managers to follow a process when selecting as-a-service software: “The selection process should be based on a documented template that can be shared with all stakeholders. It is crucial that all participants agree on a uniform process and a uniform approach to the evaluation process.“
“If you give a provider 100 or 1,000 requirements, he will choose the ones with which he can distinguish himself,” Cabello points out. “That’s why you would do well to focus on no more than 25 requirements that actually make a decisive difference for your company.“
3. Due diligence is not required
When purchasing software, managers should not only make sure that the applications they evaluate and select are in line with current, but also with future requirements.
After all, the needs of a company can change, as well as the available functions of the applications on the market, as CMO Kearney knows: “Companies do not often change the software provider. It is essential to understand what distinguishes the individual providers, how they serve their customers and what the cooperation looks like after the conclusion of the contract.“
This means for companies to diversify their decision-making basis and also to include customer reviews and references and other secondary research in the course of their evaluation process.
Customer reviews could help decision-makers not only to understand what customers think about the functions and possibilities of individual products, but also to draw a picture of their relationships with the provider: “How is the cooperation with this particular software provider? How were the negotiations before the conclusion of the contract? How did the cooperation go after that? These are things that can be read from a thorough analysis of customer reviews, “ says the marketing decision-maker.
4. Inclusion Failures
User acceptance plays a decisive role in the implementation of new software. Nevertheless, many companies make the mistake of not involving users in the software selection process at an early stage, as Kearney knows: “It is important to put together a small but focused team from the very beginning that can represent how the software is used in practice.“
“The mistake is to think that you can replace a legacy application with a SaaS application without it having any impact on the tasks to be done,” Della Rosa states. “At this point, you should take a step back and, together with the HR department, consider how the tasks within the company could change by purchasing the software.“
Companies that do not pay enough attention to users when making SaaS purchasing decisions, according to the analyst, get problems: “Either users are slow to adopt a new application, or they do not fully realize its potential value.“
*Linda Rosencrance has been writing about technology topics for more than 20 years – including for our US sister publication CIO.com .