Need New Business Software? Part II - Packaged Software

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Continuing our series on acquiring new business software, we focus on packaged software. There is a wide variety of packaged software available on the market. It continues to be a popular way to acquire software functionality relatively quickly.

Benefits and Risks

Packaged software typically requires an initial capital investment in software licenses and related hardware.

Because packaged software runs from one of your facilities, you are not dependent on the vendor to keep it up and running on a daily basis. The flip side is that you are responsible for the servers and other related equipment. You are also responsible for data backups and software upgrades. Because packaged software is loaded locally, bug fixes wait for releases from the vendor.

Licensing

Packaged software usually requires an up front license purchase. Occasionally, the license is transaction-based. Review your business growth and understand the long term impact on your costs.
Identify annual maintenance fees and know what maintenance includes. Most maintenance includes new software versions, but some only includes bug fixes and minor enhancements.
Acquire additional licenses as needed. For example, a new user will often require an additional license. Keep in mind that volume discounts may be available.

Implementation

The software is loaded on a server, PC or both.
There is often complex configuration of the software that is required. Expert assistance can save implementation time and frustration later.
Make sure you review the software requirements. PCs may need memory or other hardware upgrades. New servers may be required, particularly if the application is "high availability" or business critical.
Modifications to the software may be allowed, but often make upgrading to new versions time-consuming and expensive.

Maintenance

The purchaser has responsibility for upgrading the software to new versions Stay within two versions of the current version of the software. First, you want to make use of improvements to the software. In addition, if you have a question or issue with the software, the vendor may ask you to upgrade to a newer version.
Test software upgrades involving business critical software before rolling out the upgrade for everyone to use.
The purchaser is responsible for backing up the data and restoring it in case of issues.

You have the responsibility to make sure the software you purchase meets your business requirements. Regardless of the software model, if your staff doesn't understand how to use the software, you will miss out on the benefits of the software. For a successful implementation that doesn't create a permanent drag on productivity, proactively train and address the impacts of the change.

Our next articles will detail software-as-a-service and custom development software models. A special case, open source software, will be covered in custom development.