Tips for Small Business Online Software Evaluation

Tips for Small Business Online Software Evaluation

by Christophe Primault
Published on 30 December 2011

This short article looks at several critical aspects that should be considered by small business owners when purchasing online business software (or Software as a Service aka SaaS).

There is no doubt that online software is a great opportunity fot a small business to save time, increase productivity and cut costs. But the vast amount of available solutions can be overwhelming and it is not easy to select the solution that will meet your specific needs.

In this post, we propose evaluation tips and a simple selection methodology based on best practices from the industry.

Three main objectives

When choosing online software you should try to:

  1. Reduce risk of mistaken choice and implementation failure
  2. Achieve a good ROI (Return On Investment)
  3. Align business needs with organizational requirements

Key evaluation criteria

In your evaluation you need to undertand the following aspects:

Understand the different software models

We hear the buzz word "app" all over. First you need to understand what are the different types of apps and what it means for a small business.

It is also imperative that you know the different types of business models offered by each vendor and the nuances they contain: cloud-based, hybrid, hosted and in-house.

The main differentiators are with the data: who owns it, how it is administered, stored and what are my privacy and security guarantees.

Industry specific expertise

Seek for industry specific expertise. Software solutions are multiplying to serve industry niches and now more than ever the industry knowledge of a vendor has become critical to businesses looking for cloud-based solutions.

Look for vertical industry expertise, check their clients list to find similarities to existing clients.

Check that the solution can adapt to changing business models rapidly and the vendor's past history in delivering new updates to its solution.

Total Cost of Ownership

To compare an in-house software to a SaaS product requires measurable metrics. When trying to understand the TCO, issues such as current and future subscription costs, data administration, integration costs to existing systems and support costs should be heavily scrutinized.

The Outlook

The way software is purchased and sold is changing. Once too costly applications were a barrier of entry for smaller companies to compete, now SaaS can assist in profitability and enable rapid growth. The differences in evaluating an in-house software and a SaaS solution are subtle but yet enough to disrupt your business if the incorrect selection is made - so pay close attention.

For more information you can download this guide to cloud software evaluation

or contact us for Free Software Advice

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Picture courtesy of Flickr user Tiger Pixel