1. What determines the software price? Is it Per Seat or Per User or Per Processor?
The cost of software is determined in many ways. The two most popular ways are Per Seat or Per Concurrent User. Per Seat is determined by how many seats in your business will be using the software at any given time. On the other hand, Per Concurrent User is based on a set amount of users that can access the software at one time. (Example: concurrent users mean a program with a license for 5 users can be installed on 100 machines but only a maximum of 5 people can use the system at once.) Per Processor is calculated on how many machines (PC’s or servers) the software will be running on. Many larger enterprise software applications use this method to determine their prices.
2. What types of on-site services are included in the purchase?
Many programs that are higher in price should include some amount of on-site services or support. If it does not, ensure that both (service & support) are built into your contract before purchasing. But, beware that this is the area where companies make most of their profit. Some companies count on your returning with requests for customizations of the software. Now that you have the software and have spent significant time purchasing hardware and dedicating resources, they know you are already “half way in the pool”; they also know that you will have trouble refusing to pay extra money to get what you want. These services can include anything from training classes, customizations, or help with installation issues. In the case of local software companies, keep in mind they should automatically provide some sort of on-site services (at a minimum) before purchasing. This can only help to streamline your implementation process and increase the likelihood of your success, with the added benefit of a higher return on investment (ROI). Who wouldn’t like to have that?
3. Is there a guarantee of satisfaction with their software?
This is most widely overlooked when purchasing the software. Sometimes unsatisfied users will expect a refund after deciding that it is not what they want. My experience has been that once the developer receives payment for software, it can take next to a miracle to get a refund of any kind. Prior to purchasing your next piece of software, be sure to find out their return policy and a number of days that you can have the software in your hands and still be able to send it back to get a full or partial refund. With custom-developed software it can be even trickier for the buyer, you will need to build this into the contract before work begins. It goes without saying how important it is to determine this up front in case you change your mind.
4. What is the turnaround time for getting “bugs” fixed?
Some companies will say that they will fix software issues as soon as you find one. There are others that will compile the list of “bug” fixes and release it on a scheduled basis convenient for them. This can happen either monthly, bi-monthly, quarterly or yearly. Neither path is better or worse, as long as you are dealing with a reputable software company that stays true to their word. Knowing this before purchasing the software allows you to better handle your software end-users and enables you to provide a more accurate time frame of when your users will see changes or have their issues resolved.
5. How often do program updates go out and do they notify customers?
This is another widely overlooked key item. There are two lines of thought that companies can use for updating customers. The company might decide not to notify its customers at all when updates roll out. They may think that if the customer has a problem they will contact them. At that time would they inform the user of an available update? Beware of this method of service, or lack thereof. Steer clear of companies that do not provide this as an option to their clients. The second line of thought would be for the company to notify its customers regularly about updates. They may also offer an option of including the customer on a mailing list. In this case be sure that they have multiple contacts that are on the email distribution list so that everyone who should know will not be left out of communications loop. If the software company does not offer either one of these options, you might want to reconsider your decision.
6. Is the proposed software scalable in design?
Software that is scalable in design simply means that it can easily grow with your business, at minimal cost to you. Factors include end user customizations, current database structure, and inputs and outputs like reports, and connectivity to your other database systems. Scalability is very important for small businesses because they are dynamic in growth. No one wants to jump through hoops of testing, development, customizations, and training, to purchase software only to find out a year later that you have outgrown it and you need to replace it. With proper planning at the time of purchase, only you can increase your chances for a successful software experience.
7. Can the system be customized to meet your business needs?
If you require customizations to the software to meet a specific need, a good rule of thumb is that it should be no more than a 1/3 of the price of the software price. Never forget that many times software companies will negotiate with you on customization. As a customer, any software company worth your time should want to keep you happy. In some cases, there may need to be some give and take by both parties. A good rule of thumb would be to always discuss your needs with management directly. Gatekeepers tend to drag their feet at times. Purchasing software knowing that you will need to make major changes should be a sign that you really need to take a step back and look at all of your options including in-house development, outsourcing, and partnering with software developers to cut the price.
8. What are the typical hurdles that you can expect with your planned installation?
No matter what generation (e.g. 1yr 2nd version, 10 yrs 4th version, etc…) the software is currently in, the software company should at least be able to warn you of the hurdles that they have experienced in implementations they have done. If not, this should raise a red flag for you. The software company should be keeping track of this type of information, especially if they are constantly attempting to improve their products. You will find that they sometimes run into the same issues 2 or 3 times before they take notice and take action to investigate and resolve it before future installations.
9. What are the hours of support and how does their support department operate?
Whether you are across town or on the other side of the world, if you need help and support are not available to you, the only option will be to take the system down for an unknown length of time and wait for help. Before getting married to a software company by purchasing their product, find out where the company is located and if the company has what I define as a “passive” or “active” customer support system. Follow up with pointed questions like, “Will you only return my call at certain hours of the day?”, “Will I have to leave messages and wait for the phone for your callback?”, “Will I have a direct callback from a representative or will I be reassigned to someone different every time I call?”. Finding this information out earlier rather than later should give you peace of mind when an urgent situation or quick answer is needed.
10. Ask if there is a list of items that have been requested to be included in the next update of the software. If possible also request a date of completion for the items on the list.
Before they say no, put them at ease by letting them know that your goal is to find out what features they might be including so that you can plan ahead for your business. Chances are that if someone requested something, you will also be able to make use of this feature. Also obtaining this list will benefit you in three other ways:
1. If you know that a feature is forthcoming, you can notify users beforehand and seek feedback from them on whether this is something they would like also.
2. If the item on the list is something you need, be sure that you make it known to the gatekeepers, with emails or phone calls to the software company to ensure your item is not lost in the shuffle. This happens more than you may realize.
3. When you are given such a list, review it carefully. You should be able to determine the direction that the software company is going. Are they on a path dictated by their client requests? Are there frequently little items that are minor in nature on the list? (could be negligible depending on the application) or Are there obvious items on the list? (If this is the case their testing practices may need to be reviewed to your satisfaction.) Or are they adding items in an effort to get you to purchase add-on items that you will never use?
Brett Johnson is the principal advisor for Johnson Advisory Group. His company specializes in providing impartial purchase assistance to individuals and businesses looking for the software to meet their specific needs. Utilizing his insider’s knowledge to ask the right questions, get the right answers, resulting in the right decision.
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