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Out of the box versus special development versus in house: pros and cons

August 22, 2012

In general, the scope of the decision for a business software solution falls in 3 categories: either buy it from someone who has a product that fits your needs, get someone to develop a tailored application specific to the resolution of your needs or,  use your internal IT department if they have the bandwidth to do development work.

When the requirements of a company are extremely unique, it may be necessary to get either an outsider or an insider to do the development work. If the staff is already on the payroll this may be the least costly way to accomplish a completely tailored solution. However, one important consideration is time: how long is the development work going to take? And if the developer is an external individual or firm, this can add to a healthy bill! However, the result can be the exact solution for the corporation’s needs, completely suited to the procedures and workflows.

An important consideration when deciding for a tailored solution is the fast rate of growth in the technology world. Therefore it sometimes happens that the technology has changed by the time the solution is completed! And there may be better and faster ways to do different things, but the company cannot take advantage of them due to the fact that they are operating on old platforms. Many companies have not been able to move on upgrades of our solutions due to links to customized applications  in Microsoft Access version 2, which has not been supported for a number of years!

The other part of this equation (which is quite important) is the human factor. There is always the risk, with both internal and external developers,  of having the developer leave in the middle. Perhaps the developer may move to another  industry, city or company. If the work was not completed thoroughly enough and the application development structure was not documented properly, it will take a large amount of effort for someone else to figure out how it works. This is an important piece of information while troubleshooting, modifying, improving or upgrading it. And then again, this process can be costly.

Many of the solutions that are currently in the market contain literally millions of lines of code. And even with the big names in the market, who have the capacity of having dedicated programmers and engineering departments to seek that all the details (such as documentation) are covered, when environment pieces change, such as the operating systems in computers, it takes them some time to get back up to speed. Many hours of research and testing need to be done before the release of a upgraded solution can be performed.

The other side of this coin is the applications developed by companies that are dedicated to this activity. The software industry offers a huge number of specialized solutions for all kinds of industries. However, as anything that is geared towards a good number of companies, these applications are often going to miss some of the requirements of a business.

The advantages of investing with a solution offered in the market by well known publishers are:

  • Quality of the product: as mentioned previously, developing any application is a costly proposition. Companies who are dedicated to this activity usually rely on the best talent to drive their products to be competitive, appealing and to solve the issues at hand.
  • Keeping up with the technological pace: as we all know, there are companies that have the lead on the direction of technology. And these changes sometimes happen faster than what anybody can predict! A strong publisher is always updated on the coming trends, and prepared to face them. This is probably the number 2 downfall with especially developed products: the developers take time to get acquainted with change and to implement it in the products.
  • Competitiveness: a re-known publisher will always aim to providing quality products at reasonable prices in order to remain competitive in the marketplace. Owners of their solutions usually get a big benefit from this.
  • Support: it is the norm for established publishers to house an internal customer support area, as well as in some cases maintaining a reputable network of resellers that are trained and geographically available to service end users. This eliminates the concern of losing the few people (or only person in many cases) that know how your software was built and operates.

The needs analysis phase and the “real” requirements

August 8, 2012

There are two important components of the needs analysis: the internal definition of business needs and the technology definitions to resolve those needs.

If you are in search of a software solution either to replace or improve what you have or as a solution for new needs (resulting from growth, new business lines, changes in the status of the business such as mergers and acquisitions, etc.) it is because you sense the need for it. It is vital to the future success of your solution implementation to be able to clearly define which needs  are motivating this search. It is also extremely important to be able to “dig” deep down into each requirement to understand its source. If these definitions are not done properly, you are opening the door to go on a tangent when a solution is presented and not notice that a feature may be irrelevant to resolve your problem while you’re leaving an important aspect of the problem forgotten.

Another important part of this definition is to discover if a technology solution may not resolve the problem. I have seen time and time again issues within companies that are related to lack of skills on their staff, to motivational problems, to poor management (company management, time management, stress management, money management) which are issues that generally cannot be resolved by a technology solution. This is the reason why I used quotes on the word “real” on this section.

In the early stages of the internal definition of business needs, this activity should be performed without outside help. It should be organized by managers but always with input from all staff. It is important to keep an open mind to perceptions, suggestions and experiences that, even if sometimes uncomfortable, will help anchor the detailed definition of a need.

Once the internal definition of the business needs is completed, it is important to perform an analysis of the technology available. For those business owners and/or managers who feel  they are not technologically savvy, there are a number of trusted resources that can help at this stage of the project, including  IT personnel who are usually familiar with the different offers in the market. Outside resources that provide services to an array of industries (such as CPA, legal, human resources practices) may as well offer information on the trends of the current market. Business and/or industry associations are also great sources for information. And as we all know, the Internet can offer an endless array of solutions! This last option, however, can be quite overwhelming and confusing.

In our experience, the technological side of the solution is never as important as making sure that the solution will cover all vital business needs. We often have seen companies adapt a solution because it’s working on the latest platform while it does not resolve the business issues at hand. This can be an expensive, time-consuming and frustrating discovery.

As part of the internal definitions, a set of measurable benchmarks needs to be determined. Expectations such as percentage of decrease of inventory on hand, reduction on receivables collection days, etc., are vital to define direction for the solution search as well as to measure ROI and success of the implementation later on.

Your company and your software growth

July 27, 2012

As with any other project, it is important to have a vision of  the expected outcome of this effort. The first important definition, even if it may sound obvious, is to know what future expectations for your company. This is going to be an important guideline to  ensure that your technology solution can support that direction.

Even if this is probably one of the hardest things to do, the best guess will definitely support a better decision. For example: we have seen many cases where smaller companies can have a great handle on controlling the revenue and expenses for projects based on having the correct coding in their chart of accounts. But then the day comes when they face unexpected growth that requires  having  projects pull information from the inventory. If your research for a solution does not contemplate this type of scenario, you may be in a situation later on where you may be required to spend an important amount of time, effort and money to resolve the situation. Other examples include needs for human resources controls (more sophisticated than just running a payroll) or logistics requirements (such as documentation and controls required for companies that export their products and services).

On the side of the software itself, it is very important to research the publishers of the software, the products themselves and the track record of the company that will implement and support your solution. This will give you an idea of future growth potential with the publisher. This is especially important if you decide to go with a customized developed application. The relationship with all these components can go anywhere from the following 5 years to 20! Therefore I consider this search as important as making sure that the person you are going to marry is the correct one, because if not, the consequences can be disastrous and usually very costly.

Save thousands of dollars on costly mistakes

July 17, 2012

 

Every night, after returning from work, my husband and I talk about how our day went. He works with machinery that produces plastic parts, and sometimes (I hate to admit it) his explanations leave me completely clueless!  It  is like he’s speaking a completely different language. The fun part comes when, for one reason or another, we have to sit in front of the computer to work on a simple spreadsheet. That is the moment when I feel like a fish in the water, and of course, this sounds like Chinese to him (and yes, I know this happens to all couples and it does not necessarily have to be work related).

I have been working in the software industry for over 20 years. During this time I have seen many successful solution implementations and many that, far from bringing any improvements, become a huge drain in many aspects (finances, time, etc.).

I have also invested a considerable amount of time reading books on how to sell and implement software solutions successfully. The information technology business has become one of the main backbones to any business, from large to small, mainly due to the fast response time required in these times.

 I have not seen so far a lot of information related to guiding a business owner or  upper management member of any company on how to buy a solution that better suits the business’ needs. Normally this kind of purchase is made with a great sense of confusion and hope that the right decision was made, usually with not enough information to back it up or with information provided by third parties who often are biased by external interests.

In the coming weeks we will be examining 16 different aspects that need to be taken into account when looking for a software solution of any kind.

In my day to day experience in this line of work I have learned the value of each one of these concepts. Of course, there is no silver bullet in any area of life, however this can make the difference between having a solution and having a problem, and believe me, this difference in many cases represents millions of dollars and hundreds of hours spent in fruitless efforts!

The fun of currency translations, revaluations and consolidations

January 24, 2011

Today, as many other days, I went to visit one of our customers. This company does business in other countries and we met to discuss their currency translation, revaluation and consolidation processes. And after reviewing the way they currently perform these tasks through MS Excel I could not be more grateful to have tools like our Sage PFW to take care of such chores!

It is amazing the number of intricacies that are involved with processes that were probably originally thought to be simple ones. Same chart of accounts, everyone? How about the translation types and revaluation types for each one of them? And never mind if you try to consolidate companies with different chart of accounts structures and different accounts! This not to count if you want to calculate your earnings at a subsidiary level or a parent level!

So greateful someone put out the work to produce applications that make the definitions and execution of these requirements a very easy task! So our customer will go from spending 3 days a month to produce financials to a couple of hours!

Excel spreadsheets: a solution or a nightmare?

October 7, 2010

Have you ever tried following up the links between different pieces of information in Miscrosoft Excel when some result is just not making sense? It is a job that requires an immense amount of time and patience, especially when it is your boss requesting a response right away!

Every person that has to deal with contolling some kind of information, from a checkbook to a multinational company’s budget, has dealt with Excel books. Microsoft Excel is an excelent application that has features that many of us are not even aware of.

Read more…

The trust factor in all aspects of business

September 10, 2010

 A few days ago I read somewhere about the importance of trust in any human relation. Initially, the sentence sounded directed to our personal relationships. However, this thought took me to examine the relationships we have had over the years with many of our customers, many turned into friends. Especially those relationships that have lasted over 10 years.

And I realized the importance of the combination of integrity with the capabilities to perform a job correctly and on time. This is what creates reliability for our customers, and what has made us in many instances, trusted advisors to their businesses more than just simple service providers.          Read more…