header.jpg

7 Cardinal Sins to Avoid When Purchasing Software

servers-1024x575.png

Technology solutions are complex and dynamic, involving a multitude of ownership options, pricing mechanisms and hosting platforms. Focus on the capabilities that are important to the growth of your enterprise, and avoid these seven cardinal sins:

  1. Don’t proceed with a purchase without first talking to your IT finance expert. As a business unit lead looking for new software solutions, don’t get too carried away with the promise of a new cloud or SaaS (Software as a Service) product without including your IT or corporate finance teams early in the process. Many solutions with great operational benefits get derailed because they fail to meet key enterprise balance sheet or income statement drivers.
  1. Don’t commit to upfront licenses that you might not deploy for several months, just to secure a volume discount. Volume purchasing is a great way to lock in lower prices, but exercise caution before committing. Your needs might change, and you will be paying maintenance on the unused software. There’s a reason nearly 40% of all purchased software remains unused, costing companies an average of $259 per user.1
  1. Don’t, on the other hand, settle for a smaller deal that fails to meet your current and future software needs, just to work within your own budgetary limitations. Make sure you explore financing other options by recognized financial services providers.
  1. Don’t ignore current and future needs for cross-device software. BYOD will only grow in popularity. Investigate your options for software that is adaptable to all devices used in the workplace, including desktop computers, laptops, tablets and smartphones. Explore all avenues, including alternative financing, to ensure all of your needs are met.
  1. Don’t fail to investigate the various purchasing options available when acquiring software for your business. Your choices include perpetual licenses, SaaS and cloud-based SaaS. Be sure that your needs are met both from a technology and a budget perspective before making a selection.
  1. Don’t become too enamored with short-term benefits and disregard the long-term impact on your operating budget when considering a SaaS or cloud purchase. Although subscription solutions eliminate high up-front costs, they can become expensive in the long run when customers fail to negotiate smart upgrade and renewal terms.
  2. Don’t simply trust that your vendor understands how your purchase will impact your business. For instance, when they talk about operating expense, don’t assume the salesperson understands the internal impact the purchase will have on your P&L statements and balance sheet. Which brings us back to #1. Get IT finance or corporate finance involved early. Get to know your options.
Do embrace the services of a professional. At Central, we can help you design a software acquisition that is perfect for you. Our solutions align technology costs to available operating and capital budgets, and match costs to benefits gained from the use of technology. Contact Us to Learn More.

Source:

  1. 1E, The Real Cost of Unused Software, 2015.

Recent Posts