Kison Patel is the Founder and CEO of DealRoom, a Chicago-based diligence management software that uses Agile principles to innovate and modernize the finance industry. As a former M&A advisor with over a decade of experience, Kison developed DealRoom after seeing first hand a number of deep-seated, industry-wide structural issues and inefficiencies.
CEO and Founder of DealRoom
Broken promises and technology that does not live up to the marketing hype are just two results of poorly chosen technology.
These common pitfalls make choosing the best technology more challenging than ever, with a seemingly endless selection of software tools that are available, along with well-funded marketing that seems to say all the right things.
The wrong decision can lead to a low adoption rate, frustration and a big capital loss.
Even worse is being stuck on a long-term contract for software that no one uses.
The decision-making process is now more complex than ever since organizations want representation of all the stakeholders that will either use or benefit from the technology.
Our goal when investing in technology is to have return of 5X. When someone in the company proposes a new tech purchase, they have to think through a case as to how the company will benefit to make a 5X return on the investment.
Once we have decided there is a significant value add in a purchase, we take the following five-step approach to make our decision.
The following five steps will help you make an educated decision in choosing your technology vendor.
How to choose a technology?
List problems to solve according to priority
Review vendors
Evaluate providers based on how well they solve problems
Negotiate with your top picks
Decide based on value and vision
1. List problems to solve according to priority
This step forces you to take a hard look at why you want to incorporate new technology and why you need it.
What problems do you have and how important are these problems?
When thinking about your problems, take a look at your organization, and spend time with a team that represents the different personas that would utilize the technology to find out in a qualitative way as to what your problems are, as well as the importance of these problems.
Also, think in tangible, concrete results. Once a problem is solved, what is the result?
Will it save your accounting team ten hours a week?
After you have determined what your problems are, list them in order of priority, the top problem being the most important, descending in order of importance.
2. Review vendors
After identifying your problems, it is time to do your research.
Educate yourself and review the vendors that you are interested in buying from. Use sites such as Gartner or G2 Crowd for their databases, where you can find reliable reviews to help you identify vendors and narrow down your list.
Look at the credibility of your vendors; read their reviews online.
Be aware that sometimes companies have fake reviews online–you can spot these by reading several reviews.If they all sound pretty much the same, or they sound like they were written by the same person, take a second look.
This may indicate that these are false reviews.
3. Evaluate providers based on how well they solve problems
It is easy to get caught up in looking at innovative features that a company offers and to lose sight of the real value-add of solving your problems.
The easy way to circumvent this is to present the vendor with a real problem that you have during the project demonstration, and ask them to show you how their technology would solve this problem.
During this demonstration, you can also gauge how well the provider can solve additional problems that may occur in the future.
After this demonstration, you can accurately evaluate the vendor based upon how well they can solve a challenge, and you can narrow your list down to a shortlist of the top three companies.
Lastly, during the product demo/review process, you should also get a sense of company culture and see if it meshes with your company culture.
This may sound irrelevant, but it is important; for example, a fast-paced law firm with employees that work a lot of hours may not work well with a laid-back technology company that offers support only from 8-5.
4. Negotiate with your top picks
In order to get the best price possible, you can determine what the bottom line price is by negotiating with your top choices.
Make sure you get a comprehensive description of the pricing and structure for each vendor.
Compare prices, but ensure that you take into account the other factors as well and do not let price be the only factor driving your decision. See if there is any room for negotiation.
Your first step to negotiating is to see what the total cost is for each vendor. This can be done by obtaining pricing scenarios from each vendor based on various contract lengths, user count, implementation etc., to model out annual and total contact costs.
Some vendors are very negotiable and will cut their price in half with the right conditions, while others stick to their retail price.
It is important to know what your net investment will be when determining the value of the technology.
If you might need to update the software later, ask if you are locked in to a specific vendor, as you will want to make sure you know what ongoing costs are for customizations.
Then negotiate bottom prices with each vendor.
5. Decide based on value and vision
The best choice should provide you with value, as well as a clear way in which to address your problems.
In addition, the vendor that you choose should have a culture of continuous innovation, where they are always striving to move forward and are creating better ways to solve problems.
After completing the previous four steps, you should have all the information you need to make an educated, prudent decision in choosing your technology vendor.
How to choose a technology?
List problems to solve according to priority
Review vendors
Evaluate providers based on how well they solve problems
Broken promises and technology that does not live up to the marketing hype are just two results of poorly chosen technology.
These common pitfalls make choosing the best technology more challenging than ever, with a seemingly endless selection of software tools that are available, along with well-funded marketing that seems to say all the right things.
The wrong decision can lead to a low adoption rate, frustration and a big capital loss.
Even worse is being stuck on a long-term contract for software that no one uses.
The decision-making process is now more complex than ever since organizations want representation of all the stakeholders that will either use or benefit from the technology.
Our goal when investing in technology is to have return of 5X. When someone in the company proposes a new tech purchase, they have to think through a case as to how the company will benefit to make a 5X return on the investment.
Once we have decided there is a significant value add in a purchase, we take the following five-step approach to make our decision.
The following five steps will help you make an educated decision in choosing your technology vendor.
How to choose a technology?
List problems to solve according to priority
Review vendors
Evaluate providers based on how well they solve problems
Negotiate with your top picks
Decide based on value and vision
1. List problems to solve according to priority
This step forces you to take a hard look at why you want to incorporate new technology and why you need it.
What problems do you have and how important are these problems?
When thinking about your problems, take a look at your organization, and spend time with a team that represents the different personas that would utilize the technology to find out in a qualitative way as to what your problems are, as well as the importance of these problems.
Also, think in tangible, concrete results. Once a problem is solved, what is the result?
Will it save your accounting team ten hours a week?
After you have determined what your problems are, list them in order of priority, the top problem being the most important, descending in order of importance.
2. Review vendors
After identifying your problems, it is time to do your research.
Educate yourself and review the vendors that you are interested in buying from. Use sites such as Gartner or G2 Crowd for their databases, where you can find reliable reviews to help you identify vendors and narrow down your list.
Look at the credibility of your vendors; read their reviews online.
Be aware that sometimes companies have fake reviews online–you can spot these by reading several reviews.If they all sound pretty much the same, or they sound like they were written by the same person, take a second look.
This may indicate that these are false reviews.
3. Evaluate providers based on how well they solve problems
It is easy to get caught up in looking at innovative features that a company offers and to lose sight of the real value-add of solving your problems.
The easy way to circumvent this is to present the vendor with a real problem that you have during the project demonstration, and ask them to show you how their technology would solve this problem.
During this demonstration, you can also gauge how well the provider can solve additional problems that may occur in the future.
After this demonstration, you can accurately evaluate the vendor based upon how well they can solve a challenge, and you can narrow your list down to a shortlist of the top three companies.
Lastly, during the product demo/review process, you should also get a sense of company culture and see if it meshes with your company culture.
This may sound irrelevant, but it is important; for example, a fast-paced law firm with employees that work a lot of hours may not work well with a laid-back technology company that offers support only from 8-5.
4. Negotiate with your top picks
In order to get the best price possible, you can determine what the bottom line price is by negotiating with your top choices.
Make sure you get a comprehensive description of the pricing and structure for each vendor.
Compare prices, but ensure that you take into account the other factors as well and do not let price be the only factor driving your decision. See if there is any room for negotiation.
Your first step to negotiating is to see what the total cost is for each vendor. This can be done by obtaining pricing scenarios from each vendor based on various contract lengths, user count, implementation etc., to model out annual and total contact costs.
Some vendors are very negotiable and will cut their price in half with the right conditions, while others stick to their retail price.
It is important to know what your net investment will be when determining the value of the technology.
If you might need to update the software later, ask if you are locked in to a specific vendor, as you will want to make sure you know what ongoing costs are for customizations.
Then negotiate bottom prices with each vendor.
5. Decide based on value and vision
The best choice should provide you with value, as well as a clear way in which to address your problems.
In addition, the vendor that you choose should have a culture of continuous innovation, where they are always striving to move forward and are creating better ways to solve problems.
After completing the previous four steps, you should have all the information you need to make an educated, prudent decision in choosing your technology vendor.
.svg){kind=icon}
.jpeg)
.png "Frontrunners Badge"){kind=icon}
.png "Shortlist Badge"){kind=icon}
.png "Category Leaders Badge"){kind=icon}
.svg)
.png)
