This continues a series of guest columns from practitioners and bloggers I respect. The category - The Real Deal - describes them well.
This time, it is “The Doctor” recapping a series of good, solid software spend tips
“At times, the acquisition of enterprise software can be just as complex as the acquisition of software services ... so much so that you might want to bring in a Deal Architect to help you. But if you know what to look for, you can avoid the negative gotcha's that inflate the price tag and catch many firms by surprise.
Watch Out for the Big Lie
Some sales representatives will lie and say "yes, we have that capability" when they don't, and others will give a resounding "yes, we do" if the solution only has part of the capability. Avoid the Big Lie by insisting on a live demo where you can test the functionality for yourself.
Chuck the Check Lists
Don't follow the common trade-rag practice of comparing products side-by-side using feature lists. The lists are always dominated by big vendor features, product differences can't be defined as "yes/no" entries in a 400 line grid, and it's not the features, but the functionality. Does the product support your business processes?
Wait for the Blush to Leave the Rose
New customers are highly motivated to say the software is great, they just spent a bundle on it. For a balanced testimonial of real value, talk to a customer who has been using the product for a year or two.
Don't Be Put At Ease by the Presence of an SLA
The majority of Service Level Agreements (SLAs), designed to give you a false sense of security, use ambiguous wording that insures that the vendor will get to keep your money for the length of the contract, no matter what.
There's No Such Thing as a Free Lunch
Free modules? Free support? Free training? Not likely! Either it's included in the price or it's being offered as an enticement to lock you in for a fixed term. Buy extras a-la-carte.
Don't Get Fooled by the License Fee in Disguise
Many enterprise software contracts have a deeply buried clause that requires you to pay the annual maintenance fee or lose the right to use the software. That's not a maintenance fee, that's a license fee. If you've paid a large amount to acquire the software, make sure you should retain the right to use the software (as-is) for as long as you desire.
Don't Get Screwed by a New Release
The vendor will eventually come out with a new release and expect you to pay a large tranche of money to get it. Make sure that the price of upgrades are defined up-front to understand the true lifetime cost.
Forego the Escrow
You don't have a dedicated software development team and even if you do, it's going to take them a long time to wrap their head around millions of line of unfamiliar code. What you really need is the ability to get a complete extract of your data in a neutral format (XML, CVS, etc.) at any time. That way you can always obtain a competitive solution, load your data, and keep on truckin'.
Be Clear on Software vs. Service
Some software products aren't really software at all. They require services, configuration, or other "magic" to be performed on a regular basis to keep the product running. Make sure that you can procure services from third party vendors.
Don't Get Blind-Sided By IT
You identify a new software program that will make your life easier and deliver ROI. You're about to sign the deal when IT says "we already have a product that does that with extra licenses", even though they don't! Sound familiar? Avoid this scenario by building your ROI case with the IT department. That way you can verify that no available product solves your problem and present a strong case to management.
If you follow these tips, you're well on your way to getting a good deal on the right enterprise software for you.
P.S. This guest-post is a condensed summary of the first four posts in the Software Acquisition Insider Tips series that originally ran on Sourcing Innovation. You can find the originals here: Part I, Part II, Part III, and Part IV. “
