Software Vendor Selection: 9 Criteria for Asset-intensive Organizations

Navigating digital transformation as an asset-intensive organization is extremely difficult. As you try to transform part of the business, an entire site, or the whole enterprise, determining the best software partner can feel like an endless process.

Organizations are met with a wealth of options on how to proceed, from building custom software to software vendor selection. Each presents its pros and cons:

These nine components should be considered when selecting a vendor. Keep in mind, these criteria can also help your organization choose between the options of software (plus some others) stated above.

Often overlooked is a vendor’s expertise in your specific industry and software. With the introduction of hyperscalers, start-ups, and other options, organizations are now getting sucked into the ‘art of the possible,’ rather than, ‘How can I get the most from my software today?

Ensuring a vendor has the proper depth of industry experience can be critical when identifying a long-term digital transformation partner.

Keeping with the topic of a digital transformation partner, organizations should strongly consider the scalability and composability of an offering. As your organization grows, brings new assets online, and navigates other challenges, being able to flex your software into new use cases and outcomes is critical to getting the most out of an investment.

Gone are the days of a single vendor being able to provide solutions for every need. Although some vendors might claim that ability, there is now a growing adoption of software ecosystems for enterprises to get the most of out their data. When vetting a provider, it is important to consider which systems they can integrate with — and how your data will be contextualized.

Although harder to determine, vendors should provide data management capabilities that enhance the data your organization already has. This means the software should be able to work with data hierarchies, match data standards, and distinguish good data from bad. More so, this data needs to be held securely, whether in a data lake or other storage device. By selecting a vendor with robust security standards, you can also ensure compliance by adhering to industry requirements.

When investing in software solutions, your organization needs to feel confident that a vendor can provide support services, training, troubleshooting, regular software updates, and a main point of contact for day-to-day activities. You could partner with a vendor with a global presence, local offices, and assigned employees to help your organization exceed expectations. Another level of support to consider is the access that your organization gets to the Product Management leaders of the vendor. This connection between the Product Expert and your buying group can make the difference between a successful engagement or falling short of critical outcomes.

Qualifying the cost of a solution should follow the exploration of the prior criteria. Many times, cost is associated with a perceived number by an organization or a set budget point. For vendors, they must be able to show an ROI that supports the cost to ensure a mutually beneficial partnership. In this case, the cost would be variable based on the deployment type your organization deems to be the best fit.

In software, there is no such thing as guaranteed availability. Going digital comes with new sets of challenges that must be faced to allow for the accessibility of software for an organization. However, many vendors can point to an expected range. It is important to remember that both performance and availability are a shared responsibility between the organization and vendor.

While choosing a vendor, it is important to see references that align with the needs of your organization. Many vendors can show large ROI numbers or cost-decrease insights — but they may not align with how your business operates. When looking at a vendor’s references, it is critical to ask for both public and private references that highlight the outcomes that you are looking to achieve.

A future roadmap is always a big topic when selecting vendors as organizations look for clarity on what’s next and to understand if a vendor can be a long-term partner. Although this is important, an element to consider while reviewing is the concept of ‘vaporware.’ Vaporware is often seen in roadmaps when vendors promise major future releases, with little to show in terms of a path to achievement. So, while important, a roadmap could also impede achieving desired outcomes.

Ultimately, selecting the right partner(s) for digital transformation is always tricky.

On one hand, your organization has a budget for software vendors, and on the other, you have a vision to do more.

Before engaging with vendors, whether current or new, it is always important to align on the direction of your business. In many organizations, software buying decisions are made in siloes, leading to issues down the road with adoption, integration, and return on investment. By determining the current ecosystem of the organization and vetting target outcomes, you can best determine a shortlist of how you want to deploy your software — and who can partner with you in that deployment.