Skimping on Due Diligence is a Costly Mistake
American entrepreneur Barry Farber once said, “There’s no reward in life without risk.” While it’s true there’s no way to remove all risk without shutting your doors and forsaking business altogether, there are proven methods for reducing and managing risk to achieve greater success. For example, conducting a systematic due diligence process when implementing new software is an investment no company should do without.
Avoid saying, “But I thought it would do that…” ever again.
Ever spent months getting staff members proficient on a new software system only to find out it did far less than what you expected? Due diligence is the best way to investigate and verify the accuracy of information provided to you by the software vendor. Proper due diligence will affirm assumptions you and your team have about the vendor and/or the software solution;
it identifies risks involved with the implementation and gathers critical information to plan for during integration.
Key aspects in due diligence include:
- Fit. Does the software do what your company needs it to? Salespeople can sell a solution by focusing on bells and whistles, but you need to find out whether the software fulfills your business’s day-to-day requirements. Many solutions are designed with modularity to allow ongoing implementation of additional features to grow as your business develops.
- Completeness. Does it meet all your requirements, or are there gaps? Thorough due diligence will illuminate any areas where the solution does not contain functionality for your processes. Many times new features may replace outdated, existing procedures.
- Reporting and Analytics. Will it provide you with accurate and timely information? A software solution’s ability to provide relevant data when you need it helps your leaders make better and faster decisions. Reporting features such as “soft closes” speed up business processes and make your business more agile.
- Integration. Does the software “speak well” with other solutions you’re already using? Ideally, it’s a good idea to talk with other customers of the software system that have already integrated it with the same or similar third-party solutions to ensure it blends seamlessly. If APIs will need to be developed, ascertain who will be responsible for writing them.
- User Interface and Experience. How easy is it for staff to use? During due diligence, staff and managers should view step-by-step transactions or try them for themselves in a mock environment. Other customers of the vendor can provide you with valuable
- Total Cost. What is the full cost with licensing, maintenance, implementation fees, API development, ? Vendors should provide you with estimated costs for the first five years of the contract.
- Hosting. Will you host the software on your servers, or does it reside in the cloud? There are many options for hosting, and vendors can walk you through the pros and cons of each. The pricing structure will be very different based on the hosting setup, too.
- Speed of Implementation. How soon can your company be up and running on the new software? It’s important to ask when the vendor can schedule you for implementation and talk with other customers to get a realistic picture of how long the complete implementation process will take.
- Mobility. How and where can employees access the software? Some solutions can only be operated on a networked PC terminal, while others can be accessed from PCs, tablets, laptops, and even mobile devices from any location with internet access.
- Vendor Viability. Is the vendor poised for long-term stability? It’s essential to review the vendor’s periodic statements, financial ratios, and key performance Not only do you want to rest assured the company will exist long into the future, but you need to determine if it has sufficient resources to weather the ups and downs of business cycles.
About WEnd Consulting Services
WEnd Consulting Services contributes professional expertise to help business owners and leaders in the petroleum and refueling industry grow their businesses and achieve success. We believe all companies, no matter the size, can compete and deliver excellence to their customers, and our team is committed to helping them along the way.
For more information,
contact Dylan Gamboa
or 812 909-6010