When selecting software vendor partners, the right ways to identify the best fit vendor partners is to look primarily at the experience and skill-set of the development team, and the portfolio of completed projects. The usual questions asked to relate to testimonials, experience, costs, and training. While these aspects indeed constitute the basic due-diligence areas for selecting a competent software vendor, the devil lies in the details. Many enterprises make the mistake of conducting a superficial due-diligence, only to regret it later when a half-baked software with messed up implementation stares at their face.
These are the 6 most common mistakes many enterprises made in selecting software vendor partners and can be avoided by taking a few justification steps.
1. Cost, The Lower the Better
To get hight R.O.I, many enterprises would assume that the cheapest digital solutions are the best to invest and this is absolutely wrong! Many enterprises are looking primarily at the budget figure proposed by the software tenders and this can be considered as one of the aspects in justifying the investment, BUT definitely should not the major factor. Many cases whereby the business owners who had paid fully or partially for the “cheapest” software vendor partners, ended up with the results are miles far apart of the expectations and couldn’t be delivered on time.
Here are some tips to justify the cost proposed by the vendor partners, first of all, you can justify the investment by looking at these questions:
- How long do you want to rely on this customized software solutions? – For years and beyond, we believe.
- What obstacles do you want to solve in getting the customized digital solutions? For instance: A luxury collectible footwear start-up would like to build an auction marketplace that allow both sellers and buyers to consign and bid in the ecosystem. There is no ready-made platform in the market that allows a fully automated bidding system and thus, a customized solution is needed.
- What improvement you wish to achieve from your existing digital solution, which you had probably subscribed a ready-made platform, or had it developed years back then? For example: A shoe trading company had its e-Commerce platform built for years and it could not fulfil many needs from the end customers to do partial delivery, allow automated aging reporting and automated loyalty points allocation. All these problems are ESSENTIALS to retain & regenerate great pool of sales, thus, an upgrade is necessary!
- The future hidden cost! – this is the killer question you have to sit down and draw out in depth. For example: The shoe trading company has subscribed to a ready-made e-Commerce platform but it is full of limitations, to continue upgrading the technology specs, the company has to pay at least RM3,500.00 a month, which is RM 42,000.00 a year, and has to pay that amount of money for years as long as it is operating still. Imagine the cost invested for 5 years, a Mercedes C-Class is not an issue apparently.
In overall, a cheap budget software vendor partner doesn’t assure good returns, and in your common sense, there must a voice telling: “Pssstt! Do you think you trust this vendor to get what I wanted in my digital solution, to get all my problem solved now and in the future?”
The answer is mostly “Nope”! We have a favourite case whereby a stationary supplier company that spent only RM 9,000.00 to build a business to business (B2B) platform to allow his clients to order digitally with automated procurement processing. Sound easy right? But his previous vendor partner has used up 7 months and ended up the platform is abandoned. Why? The vendor partner could not deliver! Imagine the total losses the stationary supplier company has to bear with within that 7 months. Unbearable.
2. The Sweet Talker: over promising & over committed
Yes, majority of you have faced this definitely.
“No problem, with this cost I can assure you to deliver within a few weeks, including all the design and development!”. This sentence is the most frequently used by the sweet talking vendor salespersons out there. And most of the time, the results are half-baked. Take for instance, the stationary supplier company’s previous software vendor said that too. “Hey, no problem, with this RM 9,000.00, we can assure you to launch the B2B platform within 2 months”. Ended up it was 7 months apart, and no result is shown.
Of course, there are tips to counter that:
- Be clear in mind that you are not going to have personal relationship with the vendor first of all.
- Ensure the vendor UNDERSTANDS all the requirement and needs you wish to fulfil.
- It is your rights to request the vendor to have all the requirements plotted with a convincing timeline.
- Double confirm with the vendor about the pricing, timeline, and other commitments.
Last but not least, if you tend to fall into those sweet talking, kindly read the other mistakes below.
3. Hidden, Undefined Requirements & Broad Needs
Many enterprises will be surprised that this mistake is done wrong at the first step in software vendor selection, is to define the needs of the enterprise in a clear-cut manner, without any ambiguity, and match such needs with the features and functionality proposed or offered through the vendor’s software. A related consideration is to seek a fit with the vendor in terms of having the same outlook towards the business, in terms of a proactive attitude, prompt and transparent communications, focus on agility, or any other traits.
In short, YOU, the customer and the software vendors are both RESPONSIBLE for this mistake. The reasons are pretty simple. Firstly, you need to deliver your requirements and needs to the vendors. For some of you that do not know to communicate clearly, take it as simple as you can, explain your EXPECTATIONS in depth to the vendors. Here are some samples collected recently in a customizable chair system e-Commerce project that we had encountered.
Sample 1 (too simple): The client: “I wish to have a simple e-Commerce to list and sell the chairs online, to have orders pumping in and I wish to edit the inventory easily.”
The result of Sample 1, the previous vendor proposed to use a ready-made software platform that allows drag & drop, which is nothing wrong. BUT it is the vendor’s responsibility to ask more questions and understand the real, hidden, and undefined needs.
Sample 2 (explain a little more in depth): The client: “I wish to have a simple e-Commerce to list and sell the chairs online with some chargeable OPTIONS for the customers to choose. And in the future, I wish to expand the categories with many more options that will affect the general pricing too.”
See the difference? And a GOOD & RESPONSIBLE vendor shall ask some in-depth questions, for example: What are the options, what are the pricing differences, and do you allow combination in all options to the chair? If these requirement and needs are catered, a templatized e-Commerce website definitely is the best choice.
Your software vendor is responsible to get the right questions asked to capture all of your needs and expectation despite how “simple” the project is, and the vendor is responsible to plot all your requirement down and seek for your confirmation. Indirectly, this is called pre-sale consultants and most of the quality software vendor covers this.
4. No Black & White
A quality software vendor company shall equip the customers with proper plotted black & white in order to confirm the specification and to protect both parties. DO NOT be fooled by a piece of quotation that shows you the executive summary when comes to having your software custom built.
Some steps that are practiced by a quality software vendor company:
- Quotation with full specs
- Each module descriptions and costing
- Projected / Confirmed timeline
- Signatories from the service provider and the customer
- Terms and conditions
- Payment terms
- Terms of maintenance & support
- SLA’s specs
- Supported platforms / browsers and their limitations
And for you, the end client wise, these shall be furnished to the service providers:
- Non-Disclosure Agreement
- SLA’s confirmation
If you happen not to have these two above, kindly prompt a formal message or an email to inform your vendors, to protect yourself and indirectly warn the vendors.
5. Service Level Agreement: the support, training & maintenance.
Many enterprises leave it at this stage, which is a cardinal mistake. Unless the enterprise is a startup with no legacy systems or business data, it becomes imperative to migrate some or all of the existing records to the new system. This is important to keep your online business or online operation running smoothly. When you encounter some errors, bugs or roadblocks, you have to ensure your software vendor are there to assist you.
A quality software vendor provides these in general:
- Level 0: shall be done by the customer’s team and vendor’s support team. For example, user experience issue gathering / reports and more that can be solved easily.
- Level 1: Some bugs & fixing shall be done by the vendor’s support team and technical team. For example, some bugs that affect your business operations and can be solved by workaround method while the technical team is fixing them.
- Level 2 and higher level: Deadly issue that requires instant support that shall be done by the vendor’s technical team. For example: an error / a bug that blocks the usual business operation, this shall be attended immediately by the vendor’s technical team.
6. Warranty Period of the Built Software Solution
Do you enjoy FREE warranty period when purchasing your Mercedes C-Class? Yes, this applies to your software vendors as well. A quality software vendor provides at least 6 months to 12 months waived warranty, maintenance & support period. This reflects who confident the vendor is on the proposed solutions and how committed they’re.
During the free warranty period, you may request helps/ bug fixes / errors fixes and more from the vendors and it is their responsibilities to ensure your satisfaction is met.
Lastly, a good quality product and services come with a certain cost. Take a good look around, have you encountered some lousy works with the cheapest pricing vendor? Another way round, did you encounter some lousy works from sky-high pricing vendor? If yes, what mistakes have you made from the 6 deadly points above?
Download our 4 pages of “How MAD Works for YOU?” here, this is how are we constantly providing digital solutions for multiple local SMEs & international companies over the years.