This is a guest post authored by Jessi Engelke, Principal Consultant at One Stone Solutions.

Imagine that you spent $64,000 on a new software solution, only to find out a month later that it doesn’t meet your expectations. You signed a 5-year contract with the software vendor, and your annual fee, after the first year, would be $17,000. In total, you have committed roughly $150,000 to this software solution. 

In my prior work as an implementation consultant, I was assigned a client who made this mistake. It was my responsibility to inform them that their assumptions about their purchase were far from reality. Although I had worked with clients before who made similar mistakes, the stakes in this project were much greater. This experience taught me the importance of thorough research and planning before making any software purchases. 

If you’re a small business owner, you can not afford to make costly software mistakes like this one. Here are 6 steps to help you choose the right software for your business. 

1) Define Your Business Needs

This may seem like a no-brainer, but many people skip this step. Getting clear about the problem you are trying to solve is essential to finding a solution for it. If your business need is too vague, you will have a tough time narrowing down solutions. Too narrow and you will wonder why you are spending all this time on it. If you’re struggling with this step, consider focusing on a set of repeatable tasks within a phase or cycle of your business. 

Examples

• If you sell a service, focus on the welcome phase for a new client. 
• If you’re selling products, focus on order fulfillment or inventory management. 

Your business needs are unique to your business. Some solutions will solve only one of your needs while others can solve several. Your role here is to define and quantify your essential problems before you go looking for solutions. 

2) Create a Requirements List

Reflect on your business needs and create a detailed list of expectations for your ideal software solution. Leave nothing out. Be sure to consider things like access methods, user seats, and customer support. Do you need to access your software via an app on your phone or is a web browser/desktop app sufficient? How many user seats do you need? Don’t forget freelance, seasonal, or contracted help. What level of customer support do you need? Is email during business hours enough or will you need a dedicated Account Manager? 

Lots of people choose software solutions for the wrong reasons. For example, their peers recommended it or the sales demo looked convincing. I once worked with a client who purchased a year’s subscription to Calendly before realizing her CRM (Customer Relationship Management) had a free scheduler tool already embedded. That was $200 she could have spent on advertising instead.  

Sometimes folks get lucky and the software they choose is everything they were looking for, but more people who purchase software before making a requirements list are extremely disappointed and end up canceling the software in a few months. 

The profoundly unlucky have to wait several years for their contract to end before they can purchase another software. These folks will have to consider the cost of migrating their data as well, which is another time-consuming and expensive task. 

A requirements list helps you make smart choices when shopping for software. 

3) Make the Implicit Explicit

Go back to your list and write down anything you want your ideal software to do “automagically.” If you want the software to auto-populate a name onto a document without you typing it in, write that down. If you want the software to produce a specific type of report, write that down too. 

A mistake clients make is assuming their software does something that they think it should. In the example above, my client assumed their internal case management software would “talk” to their state-mandated reporting software without a custom connection being built. 

Automation is an area where I see a lot of assumptions made by software purchasers. Without going into too much technical detail, automation is expensive and often highly user-specific. If automation tools are available, they are often a premium feature that customers must pay extra for. 

4) Prioritize Your List

Go back to your list and assign priority next to each item. Something like a 1 for “this would be nice” and a 5 for “this is mission critical” will do. Allow yourself to be flexible with your value assignment. Not every feature on your requirements list will be “mission critical.” Similarly, what is “mission critical” for you today may not be “mission critical” 2 years from now. There are also other solutions you can add to existing software (like Zapier) that can fill in gaps in a lot of cases. 

• Mission critical = showstopper. If the software does not do this thing, it will not make it to your shortlist. Things like the ability to apply Multi-Factor Authentication or if the software has met HIPAA privacy requirements are typically marked “mission critical.” 
• 2,3 and 4 = user experience. For example, to what extent can the administrator customize a user/client portal, or whether the software can collect payments and provide a receipt? 
• Would-be-nices = your preferences. These are typically things that are highly individualized to your business or are highly subjective. When I was looking for a CRM, my “would be nice” was that it allowed me to standardize branding/colors across forms (I chose HoneyBook).

5) Research and Create your Shortlist 

Now that you have a comprehensive, clear, and prioritized list, it’s time to start researching solutions to add to your shortlist. The ideal shortlist is only 2-3 options long. The key is to remain laser-focused on your most important priorities. With billions of search results on Google, you will NOT be able to research every option, rather use your time wisely. 

Allow yourself to spend the better part of an afternoon (3-5 hours) researching and looking through reviews. Do not schedule any demos yet. A strong software match is one that gets you 80% of your entire requirements full list (while hitting 100% of your mission-criticals). 

6) Schedule Demos and Choose

Once you have your shortlist defined, then it’s time to set up demos (live or recorded) and trial accounts. I recommend you set aside a week or two for this part and try to schedule your demos close together. With 2-3 options, this should be relatively easy to do. From there, you should have a clear choice of who to go with. 

By following these six steps, you can make well-informed software decisions that will benefit your business for years to come. 

Thanks to Jessi Engelke from One Stone Solutions for this article. If you would like to connect with Jessi, you can contact her on the social links below:
https://www.linkedin.com/in/jessi-engelke/
 https://www.facebook.com/onestonesolutionss
 https://www.instagram.com/one.stone.solutions/

Thanks for reading! Feel free to leave your comments and questions below, or check out this article on the benefits of learning new software for your career.