The true cost of choosing the wrong software solution
Buying software solutions for business has become the stuff of nightmares
Those who endure finding the exact option they need often go through a hellish months-long process. Those who make quick decisions based on biased market comparison sites end up with the wrong solutions.
The entire buyer-seller dynamic is backward. Vendors pitch solutions regardless of whether it satisfies the company aims with little to no risk. Salespeople try to rig the game in their favor pushing notions like “If you didn’t write the RFP, you shouldn’t participate in the process.” Salespeople want to be the ones who set the project requirements in their company’s favor, so they are guaranteed to win your business. This is hurting companies.
By not finding the right technology needed to achieve business transformation, companies lose out on the benefits of digitization and automation.
With innovation and cost savings on the line, buyers want a fast solution that hands the power to salespeople. That power shift loosens the rigors of the evaluation and selection process; meaning companies are not getting what they want. Unfortunately, businesses miss out on game-changing benefits capable of bringing them to a whole new level of operations.
Choosing the wrong solution costs money and jobs
We know the process of buying software is broken. It is set up with a bias toward vendors that disenfranchises the buyer. Even when buyers have the patience, they end up speaking to and demoing a huge number of vendors and doing their best to cut through the BS by themselves.
The fallout from the wrong choices leaves a lasting effect on your company.
1. Lost Revenue
There are few things more damaging than lost sales. Hershey’s, and Nike are two of the most recognizable businesses in the world who both suffered massive sales losses because of poor software rollouts.
For Hershey's, a software system failure meant they missed the entire Halloween season losing over $100 million. For Nike, a glitched upgrade cost $400 million in initial investment, followed by $100 million lost sales, several lawsuits, and a 20% dip in share price. A costly mistake in most people's eyes.
By not thinking through your needs or choosing an ill-fitted software system, businesses are at risk. Implementation can wreak havoc on your day-to-day operations and force customers to go to competitors. Getting the decision right and ensuring a smooth implementation is of the utmost importance.
2. Increased Workload & Wasted Time
Implementing any new software should be done to better your business. Whether you are upgrading the customer experience or eliminating redundant practices, there needs to be added value.
The wrong software choice can contribute to your problems. If the processes of staff are lengthened or made excessively complicated, you are increasing variable costs. By overcomplicating the sales process or product build cycle, you inevitably decrease profitability or need to increase pricing. In a market that competes over price, this will be damaging.
What hurts is that the issue will not go away. Increasing the workload will be an added cost for each product, service, or sale you make. The compounding effect over time means the price of the mistake can be huge.
3. Add-ons, upgrades, or customization costs
In some circumstances, the wrong software can still be salvageable. However, this seldom comes without another considerable outlay. In essence, you are asking the vendor to rebuild the software or upgrade it to your exact specs. This is a common occurrence for buyers who have not adequately understood their needs.
Before selection, ask the vendor whether your solution can scale as you grow, whether it can change when your business changes direction, and what add-ons and customizations you might need for the future. Failure to figure out your needs ahead of time can easily cost more in updates and changes than the initial expense.
4. Replacement and Reputational Costs
In the instance that your system is a complete flop, the dreaded replacement cost can be significant. Think of it like redecorating your house. You put in a brand new kitchen yourself when suddenly a leak causes the wood floors to swell and lose shape. Swollen wood causes cracks in the paneling and drywall, and before long, it is a mess. The cost isn’t just putting a new kitchen in; it is also taking the old one out.
Taking out failed software impacts most stakeholders. You need to hire a vendor to remove and replace the old system. You then incur the capital expenditure of a new system before needing to retrain staff members. In the meantime, the disruption to the business is affecting the customer experience, your reputation, and your brand.
Back in 2004, this exact scenario befell HP. During an ERP, a system failure meant 20% of their orders stopped going through, causing a huge backlog that they could not service. Completely dissatisfied customers took their business to a different provider. HP lost out on over $160 million in sales and took a massive dent in its long-term reputation.
5. Team Morale
The area of employee engagement has drawn huge attention over the past five years because of the business benefits. Engaged teams have better safety records, increased sales, improved productivity, and are more innovative. Keeping team morale up makes a difference.
Where a software implementation is botched, team engagement sinks for a host of reasons. Firstly, customer-facing employees take the brunt of complaints from the market. Secondly, the team experiences failure, frustration, and fatigue because they have used much-needed time and effort to upskill and train in this software. They will then have to go through the process again, which can cause mistrust in the decision-making.
6. Job Losses
Can you imagine being the IT department or CIO of Nike, Hersheys, or HP when the costs of the failure were reported? The reality of software purchasing is that there is a great deal riding on the selection. It can take your business from where it is now to where you have always dreamed of being. However, when it goes wrong, it usually spells disaster.
In many cases of failed software implementations, it usually means job losses. It starts with the team spearheading the procurement. When it has inflicted considerable damage, further redundancies are sure to follow.
The Benefits of Getting Software Buying Decisions Right
Without question, the digital transformation is taking over. Over 80% of retail US businesses opt for contactless solutions while AI and automation permeate every industry. The choice is not whether to buy or not, it is how to buy because the benefits are too great.
The Benefits of Investing in the Right Technology
If you don’t invest in software solutions, your competitors eat into your market share because they avail of the following benefits:
- Increased productivity
- Lower cost per unit production
- Enhanced customer experiences
- Information driven decision making
- 24-hour sales funnels
- Eliminated process and task redundancies
- Automated customer care
- Improved efficiency
- Effective communications internally and externally
- Better market intel
- Informed marketing campaigns
Choosing Olive for Digital Transformation Reduces Risks and Opens the Door to a Sustainable Innovative Future
We know that businesses are under increasing pressure to automate and digitize their operations. The whole world has shifted to e-commerce, contactless and online shopping, and software infusion couldn’t be more obvious.
The problem facing businesses is the risks associated with making the wrong choices. Capital costs for the old and new solutions, upgrades, training and retraining, business interruption, reputational damage and even legal fees all play on your mind. The role of a CIO is intense so treat Olive like your insurance.
Olive is the card you play when you need to protect your business because we provide the right software quickly. Olive only suggests vendors that meet your criteria and find unbiased solutions based on exactly what works for you. We don’t take any money from vendors to be featured, they are suggested only when they meet your requirements. Olive is disrupting the traditional software sourcing process, becoming the “Olive branch between buyers and sellers”.
Olive is the solution for any company and CIO facing a digital transformation. CIOs and IT leaders need efficient solutions efficiently. That is exactly what we do.