Software purchasing india

Factors to Consider when Purchasing Software

In today’s increasingly competitive, technology-driven business world, choosing the right kind of software is essential for your organization’s success. All organizations seeking to improve their activity and productivity are leveraging the benefits conferred by the world of software. The software market is very diverse. Be it cloud computing capabilities, automation tools based on Artificial Intelligence, or merchant processing options, the software market products can serve almost every possible business need.

Many business owners tend to believe that purchasing off-the-shelf or pre-built software solutions will be cheaper and easier. In most cases, that is usually a misconception. To find a ready-made software solution that meets unique needs is not always easy. One product may meet some needs while another meets others. Chances are there isn’t a single perfect solution. This then leads to the question: how best can company leaders figure out and prioritize the most important features in a potential software product?

What to Do Prior to Software Purchase

Before making a decision, carefully weigh all the available information and consider the implications of the purchase. Below are some of the steps to take prior to closing a software purchase agreement according to Forbes.

Talk to Existing Clients

When buying software or getting a service that your company is going to rely on, it is advisable to talk to people who are already using it. And the most important question for them is what happens when things go wrong. For certainly there will be a time when things do go wrong. This is meant to measure the software vendor’s response in such times. How well do they handle their clients when things deviate from the plan? It should guide you on whether to go into business with the said vendor or not.

Check That It Ticks All the Boxes

Measuring a software vendor against your own strategic needs and wants is important especially if the said software is critical as regards day-to-day operations. Do not compromise here. Ensure that the said vendor truly delivers.

Always Look for Alternative Options

The market is filled with all manner of applications and software solutions. This may make it difficult for one to find the right solution that best suits their needs. Most people often choose the first result that the search engines present them. It is not always that the first search result will be one that best suits one’s needs. Therefore, in searching for alternative options, you may actually find a solution that is better suited for your particular needs.

Try The Software

Prior to closing a deal, use the software in context i.e. with the data and in the environment intended. It is characteristic of most good vendors to offer full-feature trials of their software solutions. This is crucial in determining whether the software performs the desired function, correctly handles problems, and whether it can handle the scale and scope of data the business in question plans to process. Additionally, trying the software can uncover issues such as ease of use and adaptability.

Factors to Consider

Below here is listed some of the main factors to consider when purchasing software.

> License Suitability

> Route to Market

> Intellectual Property Rights and Escrow

> Support and Maintenance

> Suitability for Collaboration

> Terms and Conditions

License Suitability

Two of the most common licenses are:

Perpetual License – this is a one-off payment for a license with no annual renewal.

Term or Subscription License – this is a license that is granted by the software owner for an agree period of time. A certain license fee is payable throughout the agreed period of licensing. Upon expiry, both parties can agree to an extension of the term otherwise the customer is expected to cease usage of the licensed software.

A wide variety of models available for purchasing software licenses exists ranging from single user licenses to enterprise agreements.

Route to Market

A number of available routes to market exist in the procurement of software. They include:

> Direct to the software vendor

> Outsourcing i.e. purchase through a third party

> Through a partner of the software vendor

> Full competitive tender

A number of factors will influence the route chosen. These include cost, existing agreements available, software complexity, and market conditions.

It is advisable to consider the various routes and appropriate procurement regulations before commencing the procurement of any software product or service.

Intellectual Property Rights and Escrow

These are the legal rights over a given piece of software. The source code of the software remains to be the property of the developer unless sold or rights transferred. Any enhancements to the source code by the developer are also protected by Intellectual Property Rights (IPR).

IPR should be carefully considered and organizations should seek procurement and legal advice as appropriate when purchasing software especially when the software is tailored to meet specific requirements. In such a case, ownership of the intellectual property rights should be clearly defined.

Escrow is a contractual arrangement where the source code to a particular software is held by a contracted third party and can be passed from one party to another when certain conditions prevail.

Escrow agreements have the potential to mitigate risk in the event that the software developer becomes unable or unwilling to support and maintain the software. It should be considered as a contingency plan.

Support and Maintenance

Support is the advice and guidance for the customer on the products in operation. Business support is usually provided to meet business requirements.

Maintenance on the other hand provides an upgrade path to the next version of software as and when made available by the software owner.

Support and maintenance are purchasable at the time of the license at a percentage of the license value. This percentage varies widely across the market depending on value of licenses, software vendor, and market conditions.

Total lifetime cost of a software should be considered, as the total support and maintenance costs could be far greater than the initial license fee.

Suitability for Collaboration

If a number of organizations are exploring similar solutions to their business needs, then there may exist a possibility to collaborate on the procurement of a software solution. Sharing of best practices across the public sector is highly recommended particularly for software solutions. Collaborations on the procurement of software solutions have the effect of potentially minimizing the overall cost.

Terms and Conditions

Terms and conditions will vary depending on the value of the software and its complexity. Procurement and legal advice should be sought prior to making the purchase. Some of the terms to be considered are:

> Maintenance or upgrade entitlements

> Removal and reinstatement of licenses

> Exit provisions

> Support and maintenance annual incremental charges.

Other Factors to Consider

Integration

The new software solution to be purchased must integrate well with the existing systems. If you are considering a cloud or hybrid solution, you will also have to consider the integration between your cloud applications and your legacy applications within your environment. The decision arrived at should successfully add to existing systems and improve overall business operations.

Data

Modern day devices are producing vast amounts of data known as Big Data. The power of this big data can be harnessed and used to benefit businesses whether big or small. Data migration and data security must be taken into consideration when dealing with cloud or hybrid solution options. The solution selected must be able to capture and utilize big data. If not, then it may not be a good fit.

Ease of Use

How comparable is the new software to the existing ones? Is it user-friendly or is there a steep learning curve? If you purchase software that’s easier to use, there won’t be many additional training expenses for your staff. And they can get back to routine more quickly.

However, if the software is complex, you will need to take the time to properly train your employees on how to use it. The best thing to do would be to compare the benefits of the software’s enhanced functionality to the expense and challenge of training your staff to use it. If the benefits of the software features outweigh the cost of learning to use it, then it is a worthwhile option.

Security

One of the biggest concerns for every business owner is security. How impervious is the software in question impervious to breach attempts? Will the data be safe from manipulation or corruption? What is the cost of investing in additional security and is it needed? These are some of the questions to ask oneself before procuring a certain piece of software. You will typically need to invest in additional security solutions that are compatible with your office software.

Scalability

Does the software have the ability to scale to fit your business’ growing needs? By choosing software that fits your ever-evolving needs, you are investing in a product that could last you through the years to come.

Conclusion

Taking the factors discussed here into consideration, you will still have to do your due diligence before spending a huge chunk of your money on a software. Weigh the pros against the cons. Consult an IT expert where necessary. Be sure that you are getting value for your money and that the software to be procured actually meets majority if not all of your needs.

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Stuti Dhruv

About The Author

My name is Stuti Dhruv & I am senior consultant at Aalpha, primarily working on pre sales, consulting with clients on latest technology trends.