So you’ve come across a software vendor that seems to solve your exact challenge, congratulations! The only problem is it’s an innovator in an emerging category without clear buying criteria. Looking at current features and functionality will only get you so far, painting an incomplete complete picture of what it will really be like to partner with them and whether you’ll achieve the promised benefits.
It’s best practice when evaluating any potential provider to think beyond the existing product and price to consider its long-term potential. It’s just even more important to do your due diligence when a solution is still in its infancy. Factors like time-to-value, scalability, total cost of ownership (TCO), and the quality of the team will have an outsized impact on your success.
In this post, we’ll summarize the breadth of factors you should consider to make a well-rounded decision, which are described in detail in The Tell-All Guide to Buying Software (in an Emerging Category). Some of the criteria are less tangible and quantifiable, but where possible, we’ve identified metrics that you can easily use to compare tools. Any vendor who wants to win your business and doesn’t have anything to hide should be willing to share these details when asked, or even proactively volunteer them.
Performance and Innovation
Performance is the foundation of any software tool. It’s the difference between waiting just a few seconds after you perform a complex operation to see the results, and making sure you run a query first thing in the morning so that by the time you grab a cup of coffee, catch up with your coworkers, check your email, etc., it might be ready. In both cases the tool produces the same output, but the efficiency with which you can get your work done is not the same. Now imagine if you needed to make a change and re-run everything!
Closely related to platform speed is scalability and innovation. As you add more users, more data, will it be able to keep up and continue to deliver the same performance? How about as more features are added to the product - OR are new features even being added? In other words, you should also take into account whether the product has a clear roadmap. Will it continue to evolve and add new functionality to better meet your needs, along with the team to deliver on that promise?
Time-to-Value and Customer Success
New software tools only provide value to the extent that users can and do take advantage of them. Both of these aspects are embodied in time-to-value, which is meant to reflect how long it takes to technically implement a solution, as well as how long it takes for users to get trained and on-boarded. Implementation can take anywhere from just a few weeks to months or even years, during which your initiative may lose steam, or new, better technology might even come on the market!
A major driver in time-to-value is the Customer Success team at the vendor, though they can go by many names (at Alloy, we call them Client Solutions). Do they provide a dedicated account manager, who will act as your champion within the company to drive implementation? Will they on-board and train new users, or are they left to figure things out on their own? And once the initial roll-out is complete, do they disappear into the ether or continue to help you maximize your value? It’s never too early to start discussing what implementation will look like with a vendor, and ready your deployment plan to ensure you start seeing the benefit of your investment as soon as possible.
Total Cost of Ownership
If you’ve answered the above questions and are ready to move on, you’ve established that the software will help you meet your goals and do so in a reasonable time frame. Now the big question: what will your return on investment look like?
When it comes to the cost side of this equation, there’s more than just the purchase price or subscription fee to consider. Two particular areas to focus on are the initial setup, including any “customization” that may be needed, and the ongoing maintenance. These costs can have direct financial impact, like implementation fees, support and service overages, and price increases as the number of users increase. They can also be indirect, such as internal IT or operations time. What are all the resources it will take to realize the promised benefits?
If you’re at this point, everything is looking great… theoretically. And with all theories, you’ll need to test them against existing data to see how valid they are. The best source of data, particularly for an emerging category vendor? Their current customers who have first hand experience with the tool. Ask the vendor about their customer retention rates, as well as the percentage of users who log in monthly (monthly active users, or MAU). These behavior metrics are both strong indicators of customer satisfaction.
Vendor case studies are a great source too, but don’t simply rely on the company’s marketing materials. Check customer reviews: do they reinforce the same selling points you’re attracted to? Reach out to other customers for their opinions on the vendor: how easy are they to work with, and does the software provide all the expected benefits? All of the above information will help you form a 360-degree perspective before deciding whether to sign on the dotted line.
Get the Checklist
For an easy-to-reference list of all key considerations, download The Tell-All Guide to Buying Software (in an Emerging Category). It provides a step-by-step walk-through of what it’s like to buy software and specific questions to ask vendors at each stage. Whether your next software purchase is a bleeding-edge retail sales and inventory analytics platform like Alloy or another purpose-built industry solution, you’ll be prepared to navigate the process to your advantage!