Buying Small Business Software: Who Decides?

Posted January 15, 2015

By Aleksandr Peterson

Buying software for your small business can be a challenging process. Larger organizations often have dedicated procurement teams or specialized IT buyers and a standardized process for making software decisions.  But small businesses can’t afford the time and resources these luxuries require.

Many times, the people selecting and buying the software are the very same people who will use it. Software-as-a-service products make this approach easier, because they require less commitment and technical expertise to implement. In companies with fewer than 1,000 employees, roughly one-third of IT purchases receive authorization without input from IT management.

In this age of consumerized IT, letting users choose their software seems to be the obvious answer, right? But is it really that simple? 

Buying Small Business Software

If you’re reading this article, chances are you want to stabilize a software buying process that has been inconsistent and flawed. So who should make the decision? Your CIO? Your project manager? Individual users? 

The answer is that it depends. Here are three things you need to know before you decide who should be involved with buying small business software for your company.

buying small business software

1. Diversify Decisions

First, it’s never a good idea to entrust one person with a buying decision, even if that person is your CIO. Leverage the intimacy of your close-knit team to get input from multiple parties. Even consider forming a committee to conduct a needs assessment, and pitch different angles of the purchase (financial, strategic, technical, etc.). 

This is a fairly common practice. Software purchases often involve multiple people and take a couple of months to finalize. Avoid excessive democratization, however, as it can stall the process. With 10 or more people involved, expect at least four months of deliberation.

2. Select Your Stakeholders

The people who need to be on your selection committee will inevitably depend on the kind of software you’re purchasing. Let’s take a look at the hierarchy. 

  • Chief Information Officers: As a rule, your IT leadership should be in the loop on every software decision, at least in an advisory role. Though they may not have intimate, industry knowledge of the specific application, they are the most qualified to decide which vendors are trustworthy, which offer the best support, how to adapt to server requirements, or which cloud-hosted products will keep data secure. Beyond that, the necessary contribution of your CIO or systems administrator will vary depending on the complexity of the system. Some solutions will require heavy IT guidance, such as customer relationship management (CRM), project portfolio management (PPM), or enterprise resource planning (ERP). 
  • Chief Executive Officers: Certainly, the head of the company is too busy with big picture concerns to meddle in something so tedious as a software purchase. That’s a valid argument, but a CEO might get involved for a number of reasons—sometimes only for final approval, other times to play an integral role in searching and selecting, measuring return-on-investment (ROI), or fostering user adoption. The size of your business and your CEO’s leadership style will largely determine the degree of their involvement. 
  • Chief Financial Officers: For many small businesses, the budget is the rudder that steers operations. Since every software decision involves a monetary expenditure, it’s a good idea to call on your chief financial officer to help conduct a financial analysis and calculate future operational expenses. Even if the CFO will never touch the software, you still need to know if it’s financially sound for the company. Conversely, maybe you’re looking for cloud-based accounting software, in which case the CFO would be especially relevant.  
  • Business Managers: This includes department heads and lower-level leadership, such as marketing directors, sales VPs, HR directors, and project managers. These stakeholders should obviously be involved in decisions affecting their departments, as they have the best understanding of their operational needs—i.e. which features are valuable in a system, which they will never use, or which regulatory compliances are mandatory. If your business is small enough, you can even consider gathering input from a handful of individual users. 

3. Seek Outside Help

Most business owners don’t hesitate to hire an accountant to help them navigate the mysteries of the tax system. And yet, when it comes to technology—which is equally or even more complicated—they clutch their wallets and insist on autonomy. You may not always have the expertise or experience to make a well-informed decision. This can be especially true for start-ups buying their first IT systems. 

Consider seeking help from an unbiased, outside resource, like an IT consulting agency. Many times, a consultant can protect you from buying a product that’s too expensive or simply not right for your needs. And, of course, there’s the obvious benefit of having access to insider knowledge. 

The key to making a successful small business software purchase is to find the right balance of relevant stakeholders and leadership. It takes equal parts of guidance from IT concerning technical aspects of the purchase, and from business leaders concerning strategic aspects. With this balance, you're more likely to avoid unpleasant surprises.         

Aleksandr Peterson is a research writer at TechnologyAdvice. He covers CRMs, gamification, project management, and other emerging business technology. Connect with him on LinkedIn.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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