Software // Enterprise Applications
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12/16/2013
09:06 AM
Tony Byrne
Tony Byrne
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6 More Enduring Truths About Selecting Enterprise Software

Buying business software can be a tricky business. Pay attention to these truths and warnings.

Editor's note: This is the second of two parts. Read part 1: Six Enduring Truths About Selecting Enterprise Software

Last week, I wrote about how customers have become more savvy about buying enterprise software and more open to experimentation about enterprise architecture and user experience.

Real Story Group

Nevertheless, many perennial truths about software selection endure. I listed six software-buying truths last week that enterprises need to heed if they want to find the right fit in the digital world. Here are six more truths -- some of them inconvenient -- that can make you a smarter buyer. At the end of each one, I suggest a short lesson for your team to take away.

1. Open-source isn't much different
Open-source technology in the enterprise used to cause theological debates. Fortunately, that seems to be winding down from the realm of religious schisms to the world of business utility. Still, we sometimes see people with knee-jerk pro and con reactions to open-source technology. You want to avoid that.

Open-source technology is generally neither simpler nor cheaper -- just different. And, of course, you'll find many different business models across open-source projects. You'll want to examine those closely, since different business models lead to different incentives and obligations.

[What can agencies learn from IT investments that fail? Read: Lessons For HealthCare.gov: Recovering When Your IT Project Crashes.]

As a practical matter, during any vetting process that includes open-source technology, you may need to work with an integrator, rather than a software vendor. (There's a whole separate conversation we could have about selecting the right consultancies and integrators -- these relationships typically prove more perishable than software commitments, even though services may represent a larger spend on your part.)

Lesson: Evaluate open-source options using the same criteria as you would for commercial solutions (and vice versa).

2. Assessing a vendor's true financial health remains tricky
You've seen the vendor press releases. "We're growing like gangbusters! We have new investors! Another year of profitability!" All this may or may not be true, and even if it were true, the firm could still be failing behind the scenes. In particular for privately held vendors, you can't really believe their claims without reviewing audited financial statements.

Please note that outside investors -- particularly the venture capitalist kind -- can prove extraordinarily destabilizing for young vendors. They tend to press for exceptionally rapid growth, and if that growth doesn't materialize, they can force an ugly exit from their investment. That's fine for them but very disruptive for the customer.

I'm not a financial analyst, but I'll suggest that, for customers evaluating the health of both private and public vendors, cashflow becomes the single most important metric. Vendors will earn profits and losses. Their market caps will rise and fall. And, of course, both have long-term implications. But a vendor that runs short of cash will have to take drastic measures.

Lesson: Review audited financials and quarterly reports, but with a grain of salt, and look to other indicators of pending trouble, like cash and staff hemorrhages.

3. Big software vendors are no safer than small ones
Big software vendors and their products are not inherently more stable than small vendors. This runs counter to that old saw about nobody ever getting fired for going with XYZ.

First of all, software from the likes of IBM, Microsoft, and Oracle tends to be more platform- or toolkit-like, which can create serious upgrade risks. Perhaps more importantly, large vendors will readily undertake major shifts in strategy by acquiring and merging competing products, or by simply sunsetting a platform outright because the vendor's livelihood doesn't depend on a single solution.

Ultimately, you want to balance risk with reward. A small vendor trying to get really big, really quickly, definitely represents a higher-risk supplier, but if it is on to something really good, you might welcome the ride.

Lesson: Look beyond vendor size to more meaningful signs of technical or institutional turbulence.

4. The long-term viability of any product is best measured by the community around it
By "community," I mean third-party module developers, integrators/consultants, and, of course, customers like you. Long-suffering platforms like Lotus have continued to endure because of the strong community around them. For the same reason, SharePoint will probably endure long past the time people think fondly of it.

In other words, your technology can become undead but remain viable due to external support and enhancements. Surely, that's better than having a vendor or technology kick the bucket on you before you're ready to migrate.

Lesson: Evaluate the size, vibrancy, and independence of the broader community around any technology.

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artr
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artr,
User Rank: Strategist
1/4/2014 | 5:09:20 PM
Re: Select the Partner and Vendor / Software Together
Wirh the increasing availability of "cloud" services, that should be the route for online application development, along with back-end  functions. That will not only simplify integrations between all application components, but will also facilitate application trialing and testing to insure the proper user experiences, as well as flexible access to live assistance. It will also support increasing mobile device usage, not just desktops.

Put as much of  your user technologies into the same network "pot" (and NOT in the endpoint devices) and you will get rid of a lot of the problems we have always had with application software development and maintenance. That goes for end user personalization and customization controls as well. This is not something new, but really is "back to the future" when computer time-sharing started being used in 1964 with "dumb" teletype terminals. 

Let the migration begin in earnest during 2014!
rmerrill53701
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rmerrill53701,
User Rank: Apprentice
12/16/2013 | 6:23:14 PM
Select the Partner and Vendor / Software Together
This is some great advice, even on smaller scales than "Enterprise," where my experience lies.

I would only add one thing. Screen and select the implementation partner together with the software. Chances are, you're going to need third-party help implementing your new software. The trustworthiness and competence of that partner are going to overshadow the selected software, unless your choice was really poor.

Pre-purchase testing is expensive, so I also have a process for choosing which scenarios to focus on, described in Software Selection: An Overview of the Tall Nails(c) Process.

It's a risky business, and it's easy to armor your selection process in the wrong places. Good article!
Laurianne
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Laurianne,
User Rank: Author
12/16/2013 | 10:32:48 AM
Open Source
Love the use of the word theological in this column. Open source certainly used to be a religious debate for some people. The growing influence of the OpenStack community shows how the situation has changed.
D. Henschen
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D. Henschen,
User Rank: Author
12/16/2013 | 10:03:32 AM
Tech Isn't The Only Thing
I'd say "tech isn't the only thing" rather than "technology isn't necessarily a good thing." Writing up one of our InformationWeek CIO of the Year profiles, University of Kentucky CIO Vince Kellen told me that in addition to doing all sorts of fancy predictive analytics about student retention, the executive in charge of retention said, "why don't we just ask students if they plan to return?"

As a result, the school added a simple question to a series of mini, one-question, yes-or-no polls that the school sends out via mobile devices. So in addition to having high-tech predictive models, it also uses the low-tech mobile question, "do you plan to return to school in the spring/next fall?" If the student selects "no," they're sure to get a call from their guidance counselor. 
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