Branded Or Unbranded Software?

We regularly come across the choice to buy Branded Goods or Unbranded Goods. It may be purchasing Mobiles, Healthcare Products, Clothes, or any Business Software. Unfortunately, most users feel price as the only factor for buying decisions leaving aside all other factors. In this post, we would analyze what are the other important aspects of decision making to Buying Software.

For buying “Goods” – Quality of raw material with which it has been made up off, design and finishing are the decision-making factors.

For buying “Services” – Qualification, knowledge of person/team, backup support available, technology being used, etc. is the important decision-making factors. Purchase of Business Software is one such decision that users make to ensure the growth of the business.

Notwithstanding the legal position, ERP Software can be both Goods and Services. “Goods” because it can come with a simple plug and play mechanism, “Services” because Users often require help in understanding their own businesses and software usage.

Before we get into essential points while purchasing software lets examine a live Case Study.

During the rush of GST, Malkhani Oil depot, an SME, bought a little-known accounting / invoicing software considering price as only decision making a factor. However, they were not aware of the challenges that lie ahead.

1)  After a few days of installation, when asked about certain accounting reports, the vendor said it would be available at an additional cost.

2) When a simple ledger report was required, the vendor said it is under development, delay in confirmation with parties bought nothing but business delay.

3) The shop is about 50 square feet where barely one person can sit; whenever the support software person comes, the retail sales get affected.

4)    The support and backup team was very less, if any resolution to bug or support is required, invariably they would be at client place and hence the resolution of queries was mostly delayed.

5)    Critical reports required for filing GST / statutory compliance were not available which enhanced the chances of getting penalized by the government bodies.

Let’s dive deep in Factors affecting purchase decision of business software:-

1)    The existence of a company providing software

One should look for how many years is the company’s existence and what is the roadmap for the next few years as well. Novice company not having enough number of customers are likely to get vanish in a few months or years.

2)    Does the software have the ability to scale and grow as per the business expansion?

Scalability is one of the vital factors every customer will ask for. The software should help in meeting current requirements and facilitate the growth of the business as well. SME’s should plan out the roadmap for the next 3-5 years and essentially ask whether the ERP can be of assistance in the development of the business. One should invest in a product, which will give them good amenities and last through the years to come.

3)    The time required for training and implementation.

Having a thorough knowledge of the software is also one of the aspects of Purchasing. One should consider historic data for the average time required for the implementation of the software.  The biggest of ERP implementation has failed due to lengthy and complex implementation.

4)    Ease of Use.

The software should be effortless in learning. Complex steps in day to day accounting would make users avoid using the software. Self-intuitiveness is an essential quality for users to love the software.

5)    A backup team available in case of errors and bugs.

The bug can come in any software; however, one should consider how the help is available in case of error reported. Independent knowledge pool, as well as the call center support provided by the vendor company, should be checked before making the buying decision.

During the business lifecycle software is purchased only once or twice, hence it is important that decision is taken after observing all aspects.

To implement the above factors, you need a proper vendor to guide you through all your fall-outs.

Read our Blog on Accounting Mistakes.

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