Software Purchase Proposal Template: 5 Steps to Quicker Approvals

You've found the ideal software package, the one that will automate key business processes and save your company money. The hard part is done—or is it? You still need internal approvals before moving forward with the purchase. Depending on your company structure, you might need sign-offs from fellow company leaders, internal stakeholders, decision-makers, or buying committees. You need to make a strong case before you get the approval to move forward.

The approval process doesn't have to be a hassle. Below is a free software purchase proposal template that breaks things down into five easy steps. You'll also learn how to avoid mistakes derailing your request.

A software purchase proposal is a formal business document that outlines why your company should invest in a specific software package. The proposal should cover the reasons why your company needs the new software, the expected return on investment (ROI), implementation plans, and other details.

The benefits of a software purchase proposal include faster approval times and buy-in from company leadership. A detailed proposal also helps avoid purchasing the wrong software, which can be a costly mistake.

GetApp's 2024 Tech Trends Survey found that 58% of businesses regret a recent software purchase, and 56% of companies surveyed describe the financial impact of bad software purchases as "significant" or "monumental" as it negatively impacts business performance*. A software purchase proposal helps you avoid the issues that lead to buying the wrong software.

A winning software purchase proposal includes these sections:

• The business needs the software will address

• How the software addresses those needs

• A comparison of the software and other options

• How the purchase will impact the business and its individual departments

• A cost-benefit analysis with expected ROI

After downloading our software purchase proposal template, here are the five steps you should follow to make a strong case:

1. Pinpoint the exact business need the new software will address

The first step in the software-buying journey is identifying the problem you think the software will address. Have organizational changes in the business or processes presented new challenges to your teams? What processes and tasks can be improved?

Sometimes, the business need is obvious. Perhaps there's been miscommunication across teams, leading to missed deadlines and disjointed projects. Perhaps your sales team has been unable to reach new leads, or you've received complaints about your customer service.

Other times, finding the business need requires a little more research and data to identify the root issue. Whatever the case, your first step is pinpointing the exact problem before looking at the software.

2. Identify how the software will address your business's needs

With so many types of software out there, the software-buying journey can easily become overwhelming. Once you know the problem you're trying to solve, you can more easily focus your search on the type of software that will address your needs.

If, for example, your business challenge is miscommunication across teams, then you'll likely want to search for project management software.

If you want to increase sales or boost marketing efforts, you'll know to spend your energy looking for customer relationship management (CRM) software. If you've noticed vulnerabilities in your business's cybersecurity, you'll definitely want to look into cybersecurity software.

When you show your manager your software purchase proposal, you need to prove there is a business need for the investment. Once you identify the business challenge and the type of software that will address that challenge, you'll then be able to look at specific software options.

3. Evaluate software options

It's important to remember that not all software in the same category will do exactly the same thing. When evaluating your software options, keep reminding yourself of your original business needs and the features you need your software to have.

In this process, you'll want to:

• Compare software platforms.

• Schedule demos.

• Ask questions about how the new software will interact with platforms you're already using.

• Check reviews from businesses similar to yours in terms of size and industry that have implemented the software platforms you're considering.

• Find case studies that illustrate your vision for the business.

Be as thorough as possible, and ask the software vendors questions until you feel confident about your options.

4. Talk to your colleagues

As the proposal manager, you'll want to involve your colleagues in the proposal creation process. You can collect colleague feedback by making the software selection process collaborative. Involve coworkers who will ultimately be using the software and those who need to know how it works and might also interact with other systems (i.e., your IT and cybersecurity team).

Ask representatives to attend demonstrations, ask questions, and participate in trial runs of the software. These representatives will be crucial in the software's implementation phase because they will likely train the other people on their teams on how to use it.

Involving stakeholders in the software-buying process is essential to garnering support for your proposal. Incorporating colleagues' voices in your presentation will strengthen your case for why your manager should give the green light.

5. Understand the true cost of implementing software

Throughout the proposal process, you need to consider your business's budget. During your presentation, your manager will want to calculate the total cost of ownership for the software.

The total cost of ownership is your business's complete cost over time. First, you'll want to pay attention to the pricing models. What is the upfront cost to buy the software? Is it a one-time fee for a license or a recurring subscription plan?

Then, consider how many team members will be using it. How many users does your software contract cover? How much will it cost to train them? What will it cost to add or subtract users?

Next, you'll want to consider how the software can scale as your business grows. How much does it cost to upgrade?

Also keep in mind the potential risks involved. For example, how will you ensure safe data migration if you're replacing a system with a new one? Think about the possible financial costs and other types of risks to your business with proposed solutions for how you can mitigate them.

Fill out the form below to download our free template to use for your software proposal presentation.

As you draft your proposal, try to tailor it to the specific software in question and how it meets your business needs. Here are some tips to help you with this:

• List the most pressing business needs the software addresses.

• Now, list the software features that solve the business needs.

• Use data and metrics where possible. For example, a purchase order management system might save your procurement department 15 hours weekly.

• Explain how the software can scale as the company grows.

• Include quotes from your colleagues on how they expect the software to improve their productivity.

Your proposal should connect with the audience in a meaningful way. Here are some common mistakes to avoid:

• The wall of text: Avoid lengthy and dense paragraphs. Use headings and bullet points to break up long sections.

• Technical jargon: Avoid overly technical terms, and write a proposal your fellow business leaders can easily understand.

• Incomplete cost analysis: Don't forget implementation costs, license renewal fees, and other "hidden" costs. Ensure your proposal contains a thorough cost-benefit analysis.

An accurate cost-benefit analysis must include all costs—even those beyond the implementation phase. Ongoing costs and maintenance fees must be considered. However, you can make the case for the software's long-term ROI by focusing on the productivity gains you expect from the software.

Estimate the time employees save, thanks to the software streamlining or automating business processes. Use these benefits to estimate the payback period, which is the time it will take for the cost savings (and increased revenue) to offset the software's cost.

If some benefits are difficult to quantify in an ROI analysis, mention them separately. Explain that the full benefit may not be known now and explain their qualitative value instead.

Speed up the approval process by using the software purchase proposal template and following the five steps we list above to ensure your leadership team feels confident in your research and decision. It also helps you avoid a bad software purchase, which can have a potentially disastrous impact on your business. Now, every software purchase should have a thorough justification with detailed ROI information.