Luke Fitzpatrick is a Forbes contributor and a guest lecturer...
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Whether you're a small team or a large enterprise, you most probably need some type of software. The software can be as simple as a word processor, spreadsheet, or an email program. However, when we talk about investing in software, we typically mean something more involved and complex, like a CRM or all-in-one solution.
These systems can be powerful tools for enhancing efficiency and business growth, but they usually require a financial outlay. Reviewing whether your business is ready for an upgrade and taking the time to find the right solution could see you getting the most out of your investment.
Is your business ready for software?
A new software platform could revolutionize your business processes, but you should check whether your business is ready for software before you take the next step. Work out whether your business needs the software. Identify your business needs and consider your reasons for investing in it. Consider also whether your current hardware will support the software platform or if you need to upgrade your hardware beforehand.
Another key issue to consider when working out whether you're ready for software is your budget constraints. If you've received funding recently, you might have plenty of cash and be able to make a high-priority investment in software. In contrast, if you're working on a tight budget, you might need to plan the purchase.
Choosing the right software: which solution is right for you?
The scale and type of software a business needs vary significantly from organization to organization. Your business might need a project management solution, while another needs data analysis software.
In the hospitality industry, Nandos used food catering software to scale their business from 250 restaurants across Australia and achieved a growth rate of more than 35%. While a hotel would benefit from having something similarly specialized for its business type, for example, “a hotel management system.” A great way to look at an investment in software is to consider whether it will support you in generating new business, as well as in serving your current customers.
Keep the following in mind when evaluating software:
- Identify problems: Review your processes and operations to identify problems or inefficiencies. Keep these in mind when choosing a solution.
- Collect feedback: Ask your team or clients about where they're experiencing slowdowns, issues, or inefficiencies that could be resolved by software features.
- Features versus problems: Amazing features can be compelling, but check the features against your business’s pain points to ensure they'll be solving a real problem in your business. Otherwise, you could end up with a platform that isn’t closely matched to your needs.
- Customization: Do you need the solution to be customized or can you use it out of the box?
- Integration: Does the software need to integrate with third-party tools? For example, do you have preferred accounting, payments, and other platforms you'd like to integrate the new software with?
- Management and maintenance: Consider who you'll have to manage and maintain the software. This could be in-house IT personnel, your vendor, or a third-party IT team.
- Implementation and ongoing support: Does the vendor provide ongoing support? Do they assist with implementation?
Benefits of implementing software
The benefits of implementing new software depend on variables like your current system, your industry, and your processes. If you have an old legacy system that was slowing you down and causing problems for your employees, you could experience major gains in efficiency, including time and labor savings.
New software could provide your team with features you didn't have access to before, including enhanced security, cloud-based access, mobile-device-based access, and integration with other platforms. An up-to-date software system could also mean better compliance with the latest data regulations. You could enjoy better inventory planning and stock control, along with higher quality products and services. Updated software could provide detailed, customized reports that support smarter decision-making, management, and strategic planning, or allow for more accurate pricing quotes.
Other potential benefits of new software could be savings in manual labor and administrative time. The software lets businesses scale up and boosts their capacity. Higher customer satisfaction, better internal communication and coordination, personalized marketing, and increased sales could be other outcomes. You could also experience reduced errors and increase accuracy. All of these could contribute to improved efficiency, flexibility, responsiveness, and profit margins.
When will you see a return on investment?
After the software is implemented, you and your team could experience a return on investment immediately, such as through process improvements due to features you didn't have before. Since the potential benefits of new software platforms can be diverse, calculating the return on investment (ROI) can be an involved process.
As for payback periods, some ERP systems, for example, take only a few years to fully recover the initial investment. Generally, if you take time to choose the right system, implement it correctly and train your staff to use it, it's probably more likely than not your business will reap benefits immediately.
A new software platform could deliver incredible benefits for your business, allowing you to scale up, achieve efficiencies, and gain valuable insights for decision-making. The key is to choose the right system, match it to your business's needs, and implement it correctly.
Luke Fitzpatrick is a Forbes contributor and a guest lecturer at Sydney University—in his past, he worked for startups in both South Korea and Australia.
