building the business case for new software

Understanding the Pitfalls of the Software Purchase ProcessMichael OstermanPrincipal Analyst

Osterman Research, Inc.

©2016 Osterman Research, Inc.

About Osterman Research

• Focused on the messaging, Web and collaboration industries

• Practice areas include archiving, security, encryption, content management, etc.

• Strong emphasis on primary research conducted withdecision makers and influencers

• Founded in 2001

• Based near Seattle


About PleaseTech Ltd


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Why Osterman Research?

• Respected industry commentator

• Independent research into an important business process

• Wanted to know:

• When the impact of software on productivity can be huge, are end users consulted?

• What are the key barriers to implementing specialist software?

• How can these be overcome?


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About the Survey

• On behalf of PleaseTech Ltd, Osterman Research surveyed decision makers, influencers and others about value-added business software applications

• PleaseTech wanted to examine the stumbling blocks end users face when deploying new software, and what factors make a compelling business case for its adoption.

• A total of 193 surveys were completed with members of the Osterman Research survey panel

• The median size of the organizations surveyed• Employees: 1,600• Email users: 1,500


IT Drives Software Purchase Evaluations…Today

IT is the primary initiator when evaluating business-critical applications

End users are rarely allowed to self-select their business-critical applications

In short, users must employ these applications, but they have little say in choosing them


What About for New or Replacement Solutions?

For new or replacement solutions, business decision makers would have a much greater role in the evaluation process

But still users don’t get a say about the applications that will be employed


Numerous Challenges Abound

Cost and integration are the leading challenges in purchasing new software

Ease of use – key to end users – is much less of a challenge

Usability is not a consideration. Why?


Decision Makers Lack Key Tools

Decision makers lack important capabilities when they need to deploy a new application:

• They cannot perform cost justification

• They lack the time to make a proper business case

• Demonstrating financial benefits is difficult


Calculating ROI is Problematic

Most organizations do not have a clear process or clear guidelines for calculating the ROI to justify a software investment


Making a Compelling Business Case

There are a number of elements that would be useful in helping decision makers to make a robust business case for new software

The primary requirement for making a strong business case is also the primary reason decision makers say they cannot do so!


Vendors Can Play an Important Role

Decision makers can make use of reliable and accurate information from vendors


Does the Cloud Make a Difference?

Is there a difference between justifying applications on-premises or in the cloud?

Which applications are easier to justify?


Roles in the Budgeting Process

IT is more involved with making software budget decisions for new software applications


What is Important in Making the Business Case?

There are a number of important factors that go into the process of making the business case for new software

Employee motivation is low on the list, yet we know from previous research that motivated employees are productive employees.


Indicators of the Wrong Software Decision

User complaints are the most important single factor in helping decision makers know when they’ve deployed poor software

Yet, user input into the software evaluation and selection process is the least important consideration when making purchase decisions!


Summary

• The rights tools for the job improve productivity and reduce costs, yet 96 % of businesses do not include end users in the purchasing decision.

• Users are not consulted about the business-critical software applications they use on a daily basis - but they are the primary way that decision makers know they’ve made a mistake

• IT has been the primary driver of software purchase and budget decisions, but business decision makers would have a more important role for new or replacement solutions

• Better purchasing decisions could be made with a more robust process for producing an effective business case

• However, decision makers lack the tools necessary to make a compelling business – namely good tools to demonstate the ROI of a software solution that would help them to justify its purchase

• Users are not consulted about the business-critical software applications they use on a daily basis - but they are the primary way that decision makers know they’ve made a mistake


For More Information

Osterman Research, Inc.+1 206 683 5683+1 206 905 1010info@ostermanresearch.comwww.ostermanresearch.comostermanresearch.com/wordpress/@mosterman


PleaseTech Ltd+1 877 205 4940+44 1666 826 540david.cornwell@pleasetech.comwww.pleasetech.comblog.pleasetech.com@pleasetech

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