According to Gartner, a significant portion of SaaS spend is currently wasted, estimated at 55%. This waste is often attributed to a miscalculation of the number of necessary subscriptions, but other factors also seem to play a role. Companies frequently overlook critical steps in their software selection process, resulting in costly missteps. This essay delves into the common pitfalls in software selection and emphasizes the importance of a meticulous approach that encompasses current capabilities, architecture review, requirement capture, and a structured software review process.
Greenfield implementations, although difficult, present a unique opportunity. They enable organizations to architect and scope their entire tech stack simultaneously, ensuring synergy and efficiency. However, most businesses do not start from scratch. They are continually adding new capabilities to their existing tech stack, often neglecting to assess the capabilities of their current systems. This oversight results in untapped potential within their current SaaS offerings. Hidden gems of value can be found in underutilized features from the original implementation or new features introduced in a hosted, subscription model.
The adage "junk-in, junk-out" is commonly used in data, highlighting the importance of quality input for reliable output. This principle applies to software selection as well. Without a comprehensive understanding of how a tool will be utilized and integrated into existing processes, businesses are unlikely to harness its full potential. An architecture review is essential to identify where the new software fits into the existing ecosystem, ensuring a smooth and effective implementation. The absence of this critical step can lead to integration challenges and inefficiencies.
Requirement capture is often considered the most daunting aspect of software selection. It is a time-consuming and complex process that is rarely fully completed. However, it is a pivotal step that directly impacts the ability to evaluate if the chosen software and provider can meet the organization's goals. Without clearly defined requirements, comparing different software options becomes an arduous task, making it challenging to identify the most suitable solution.
Many organizations lack a structured software review process. Unlike software sales teams, business leaders do not frequently lead new SaaS acquisitions, which may lead to a lack of expertise in software analysis and comparison. Ironically, the starting point for creating a robust software review process should involve grading the importance of requirements. Each weighted requirement can then be evaluated on a similar scale, enabling a systematic and objective comparison of software options.
Selecting new software is fraught with pitfalls, from unnecessary expenditure to integration challenges and selecting the wrong software. However, investing the time and effort to establish a thorough software selection process yields outsized benefits in the end. By acknowledging current capabilities, conducting architecture reviews, capturing requirements, and implementing a structured software review process, organizations can optimize their software selection, ultimately achieving greater value from their technology investments. A comprehensive approach not only mitigates the risk of wasted resources but also positions businesses for sustainable growth and innovation in a tech-driven world.
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