Buying enterprise software is a business and not a technical decision
While most companies and consultants approach purchasing enterprise software from an IT perspective, we have found that approaching it from a business perspective yields far better results for the bottom line.
By definition, enterprise software purchases are costly undertakings. A look at our Software failure gallery shows these purchases also have a considerable risk of not delivering as hoped. And hope is never a good strategy in business!
Most companies making a major software purchase like ERP treat the exercise as a technical project, and invariably assign responsibility to IT. The reason why these projects fail to deliver the expected business value is because the purchase ends up being more aligned with the perceived technical IT needs than with the real business needs.
It is satisfying the real business needs that allows the business to achieve its goals, and achieving those goals is how the business creates bottom line value. To align a software purchase with the real business needs, use the Vision, Goals & Strategy model. It provides a simple framework and explains how all the parts are logically related to each other.
Vision
The business vision exists to guide the selection of business goals that are aligned with each other. This alignment focuses all effort in the same direction and accelerates business growth in the market.
What is your business vision?
Synonyms for vision: Mission, aim, direction, purpose, focus, passion, dream.
Note that the vision should never be achievable except in a trivial sense. (See blog article: Using the power of vision to align the business)
Goals
Goals are measurable and achievable, and achieving goals is how a company adds value to the bottom line. After achieving a goal, the vision is used to create a new goal.
What are your business goals for the next few years, and what is the value of achieving each goal?
Synonyms for goals: Objectives, outcomes, projects, targets, destinations, milestones, tasks.
In this model, the key difference between a vision and a goal is that a goal can be achieved whereas a vision can’t. Once a goal has been achieved it is time to set the next goal. On the other hand, since a vision is never achieved it always remains in place to guide the setting of new goals.
Strategy
Strategy describes WHAT is required to achieve your business goals and is expressed as business requirements that describe WHAT must be done to achieve those goals. Tactics describe HOW you will achieve your business requirements. You need to know what you want to do before you decide how you want to do it.
What are the high level business requirements for meeting your goals?
A business and not a technical decision
Business requirements describe WHAT must be done to achieve business goals and achieving those business goals is what delivers the real value to the organization. Software requirements describe HOW the software will meet those business requirements, i.e. the design of the software.
Since you are buying software as opposed to designing or writing it, with very few technical exceptions you have no interest in software requirements.
Note that business requirements related to a proposed software purchase are a subset of all the business requirements for meeting the organization’s current and future goals, but since software drives almost every aspect of the business most business requirements will be satisfied by software. To sum up:
Business requirements are WHAT is needed to achieve the business goals.
Software requirements are HOW the software will meet those business requirements.
Thus purchasing software is a business decision because you need to know WHAT must be done before deciding HOW you want to do it.
Too many companies decide on the software first and then try and fit it to their business, and the result is new software that fails to perform as expected. To explore how you can make better enterprise software purchasing decisions that add value to the bottom line, click the [Contact Wayferry] button below.