Software Selection: Beware of the Hype!

True Claims, Hype and Hyperbole

Have you ever heard software companies or their partners make statements like:

Did you know that our software is the most feature rich software ever made for your industry?

Our technology is the only "true cloud" technology of its kind!

Over the past year we have grown our customer base by converting customers from your current software.

More people just like you choose to work with us.

These will all likely be true claims backed by customer success stories. And yet, they do not tell the whole story.

I recently read a story about how a leading ERP Software "Flexes Cloud ERP Muscles."? The article continued to explain how the company was "trumpeting its increasingly extensive product portfolio, essentially bridging the gaps between ERP systems designed for users that sell widgets as opposed to others that cater to those that only deliver services." These "new features" will cause that company to "leapfrog many ERP vendors that have done well in certain industries but not others." An amazing story I have heard consistently for the past 20 years from all the leading software companies.

Sorting Through Claims and Propaganda

I am a trained accountant and I can make numbers tell a story. So can software companies and their agents. Here are actual claims from product websites and some interesting counter facts.:

• Oracle NetSuite makes claim to being the #1 Cloud ERP for more than 32,000 customers. At the same time SAP Business One has over 60,000 customers.
• Sage Intacct is "a best-in-class provider, our cloud accounting software products and financial management solutions", #1 in customer satisfaction and #1 "for the lower Midsize Enterprise Use Case in 2021 Gartner Critical Capabilities for Cloud Core Financial Management Suites" 5 years in a row. At the same time Acumatica reports "according to G2’s Mid-Market Usability Index for ERP Systems Fall 2022 report...Acumatica landed in first place with an overall?usability score of 8.84 or 88%"

In both cases accurate statistics which are completely verifiable and supported by whitepapers. And in this case all four of the above products scored pretty well in the G2 Report. In the opinion of the analysts, they are all relatively easy to use; however, usability is very subjective based upon a user's prior experience, technical savvy and training received. Remember usable is not necessarily intuitive, and most likely nowhere near as easy to use as that entry level software most new customers are converting from.

Customers Like You

We all want to work with someone who have experience in our industry and company size. All the major players will have a combination of customer success stories from customers in your industry, of your size, coming from your software, etc. They maintain repositories which are accessible to their partner community. These are nice and a good start. They may not be from the partner you are talking with, but that is OK as this is the first step in reference checking. The general availability is why partners should be providing these to you proactively.

The majority of new mid-market business management customers come from entry level systems like QuickBooks, Sage 50 (Peachtree), or Xero closely followed by customers who have been using unsupported older versions of software like Sage 100, Microsoft GP, Epicor or an Infor product. Most reputable partners also have experience converting data from these systems and should be able to provide references. Do not expect or ask for an exact match for your company. Although that would be nice, it is not realistic. Your goal should be to ask about the experience with the implementation process, the data conversion and training.

If you are moving to a Software as a Service (SaaS) subscription product, talk to customers about the ongoing costs and renewal process. Many subscriptions are minimums with no allowance for reductions. Some companies offer deep discounts on the initial subscription period, or low feature rates and then increase the cost significantly when a new feature or renewal is required. Sometimes it is hard to find this information unless you ask for references with specific criteria or find them from a source other than the publisher or their agent.

Selecting Software for Your Business is an Art and a Science

In our experience, each software has a personality or culture. Although all claim to be customizable, some are easier to tailor to your unique business. They all claim to have best practices built in, but if everyone would use the same exact process, there would be no differentiation for your business. All publishers have checked the cloud box in some way shape or form, but nobody is 100% cloud as we all have real people as employees and not just artificial intelligence running our business!

At I-BN we help companies select software based upon 4 main criteria:

1. Industry and Vertical - Distributors of tangible discrete products have different requirements than food or chemical. Similarly discrete goods manufacturers have different requirements than process or job shop manufacturers. Many companies not only manufacture, but distribute and install products. All of these variances help create the initial short list of "leading" and industry specific products.
2. Company Size and Complexity - In smaller businesses employees tend to wear many hats. As companies grow, users become more specialized as do many of their processes. For example, a multi-site company may have centralized purchasing. Depending upon how far apart the sites are, costs can differ by location. Key process complexity is a typical factor for winnowing the list of potential products.
3. Technological Savvy - Some companies need technology to be a "core competency," and have a staff well trained in databases, report and query writing, or scripting. For example, a make to order manufacturer often has a product configuration tool which requires constant maintenance. The degree of technology expertise in a company, or lack thereof, will also influence the selection of product and implementation partner.
4. Corporate Culture - A dynamic company in a fast paced industry has different needs than a family owned lifestyle company. Where the family owned business is looking for cost mitigation and stability, the fast paced company often looks to a process oriented software with greater flexibility (aka complexity). Is the company looking to double in size in the next 2-3 years, or potentially be sold? These factors also heavily weigh into recommendations.

Understanding the interaction of these criteria is where an independent I-BN executive provides insight to match your company with the appropriate products and partners.?To learn more about our selection process or system selection services, visit our website.?Contact an I-BN executive for a no charge System Selection Explore session.