Five Steps to Choosing the Right Financial Software for Your Company
Article

Five Steps to Choosing the Right Financial Software for Your Company

by Amy Morgan
May 13, 2021

If you’re new to making purchase decisions for software for your organization, it can be an overwhelming experience. Which software should you choose? How will you know which solution is the best one? What if you make the wrong decision?

Maybe you made the wrong choice in the past and had to suffer through the experience of discovering that the software wasn’t a good fit for your company’s needs.

Either way, selecting new financial software doesn’t have to be a stressful situation. When you follow a proven process, you can minimize the risk of choosing the wrong solution by doing some thoughtful investigation and planning up front.

Step One: Identify the Problem

One of the biggest, most frequent mistakes organizations make is to jump into researching software and talking to vendors before stakeholders have agreed on the problem they are trying to solve. That’s like test driving a new pick-up truck before you know whether a car, bicycle, or boat would be better suited to your needs.

The better approach is to start by asking questions that help you understand the true nature of the problem, who is affected by it, what effect it has on the business and what it would take to resolve it.

For example, if the problem is that it takes too long to complete the annual budget process, you could ask stakeholders questions about the current situation, such as:

  • How long does it take you to complete the annual budgeting process?
  • How many people are involved?
  • Why does it take so long?
  • Which steps are the most cumbersome or problematic?
  • How does the current process impact your job?
  • What impact does the slowness of the current process have on other areas of the company?

By the way, if budgeting is coincidentally the problem you’re trying to solve with new software, you might want to read this article on the most common mistakes companies make in financial planning and analysis (FP&A).

Step Two: Define Your Requirements

Once everyone’s agreed on the specifics of the problem, it’s time to map your needs to software requirements. For example, if many people in many different locations need to use new budgeting software, one requirement might be that the solution be cloud based to make it easy for people to access no matter where they are.

Ask the team more specific questions about what it will take to solve the problem. This will help you understand what the new software will need to do and how it will need to function to make it a successful solution to your organization’s problem.

Using our annual budgeting example again, you can ask questions such as:

  • How will new software improve/change the process?
  • Which parts of the process should be automated?
  • Who will need to be able to use the software and how will they use it?
  • What other systems or data sources will the new solution have to integrate with?
  • What improvements will the software need to achieve to be considered successful?
  • Which software capabilities are must-have versus nice-to-have?

Step Three: Research Potential Solutions

Now you’re ready to conduct research into potential software solutions. The following are some tried-and-true ways to make sure you’re looking at all the available solutions that might be a good fit for your needs:

  • Conduct internet research to get acquainted with the latest offerings
  • Download analyst reports on the types of software you’re evaluating and analyst ratings of software in the category you’re researching
  • Draw on your own experience and get up-to-date information on vendors you’ve worked with in the past
  • Reach out to colleagues in your organization to get their recommendations
  • Ask your contacts in other organizations similar to yours what they use
  • Visit the websites of the vendors on your list and read their white papers and reports

As you collect information about different software packages, begin tracking which ones appear to meet your requirements versus ones that don’t.

If you haven’t already thought about it, it’s also a good time to start researching an implementation partner. Are you planning on deploying and setting up the software all on your own? While large enterprises often have an IT department that can help with software deployment and set up, a software partner understands how to optimize the configuration and can reduce project risk, streamline the deployment and accelerate the timeline for getting everything running and generating maximum business value.

Step Four: Re-Confirm Your Budget

Before you choose a potential solution, take the time to re-confirm your budget for the project. It doesn’t make sense (although it would be fun!) to test drive a Maserati if your budget limits your choice to a Kia or similar model. It’s the same thing with software; some solutions are designed for large enterprises that need every possible capability. These packages are priced accordingly and may be out of reach — not to mention overkill — for your organization.

This is also a good time to think about what’s called total cost of ownership (TCO). The true cost of software is more than the initial amount (purchase of a license for software or subscription to a cloud-based service). It also includes the cost to effectively use the software and support users on an ongoing basis, which can include training, integration with other software, management of the solution and purchasing and implementing future product upgrades.

Step Five: Choose a Solution

Because you’ve invested the time upfront in determining the problem you’re trying to solve, defining your requirements and confirming your budget, you have what you need to evaluate the potential solutions you identified in step four and create a short list of vendors that you believe would be a good match for your needs.

With your short list in hand, begin by reaching out to the prospective vendors to further qualify their solutions. Don’t be afraid to talk about budget and price ranges in the initial qualification outreach. You don’t want to waste your time (or the vendor’s) if it’s obvious your budget and a given solution’s typical cost are nowhere near each other in terms of price.

When you schedule demos of the software, work with the vendors’ sales teams to ask them to demonstrate the specific capabilities that are most important for the success of the software in your company. This would typically be a top five or ten list of your must-have requirements. Be sure you also consider ease of use of the software. Even if a solution meets your must-have requirements, if it’s difficult to learn and use, that will impact user adoption. If people can’t or don’t want to use the software, it will fail to achieve the benefits your organization anticipates.

Finally, consider all the selection criteria for your new software and choose the one that offers the best fit for your needs and budget.

Final Thoughts

Congratulations! You’ve made an informed decision that minimizes risk and maximizes business value.

Just remember, you don’t have to do it all alone. An external partner with expertise and experience helping other companies like yours can be a valuable resource in the selection of the right software. The right partner can help you decide which requirements will best address your business needs and even provide insight on whether a different approach such as services or training might be more appropriate.

For tips on how to have a successful software implementation, reach out to our experts.

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Amy Morgan Headshot
Managing Director
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