For today’s tech leader, sifting through this ecosystem can be a daunting task, especially when business pressure to constantly innovate and add real-time value is often unrelenting. With a broad spectrum of choices on the market, a handful of critical decisions could make or break success.
In this two-part series, I will guide you through a pragmatic approach to selecting the right product and share some specific tips and strategies on how to approach the software vendor due diligence and procurement process. But first, in part one, I lay out the broader context of ensuring strong organizational alignment and clear objectives setting, as this is pre-foundational to layering on any new software solution. Let’s dive in!
Ensure deep alignment with the business strategy
It is critical for a technology chief to always be thinking beyond the IT office and be entrenched in the broader organizational mission. Having a deep view on the company’s medium to long-term plans and vision will help ensure a mindful and pragmatic approach is taken to new software buying decisions.
For example, what is your board and senior management group thinking for its next wave of digital transformation? Is there a bigger change agenda on the horizon or a boutique acquisition at play that could alter the organization’s tech landscape or priorities?
Moreso, could there be game-changing M&A activity that might result in an entirely new set of technologies becoming the base for the business ahead? These are important dynamics and considerations to have a solid view on before procuring new technologies for the enterprise.
Optimizing the current landscape business processes
Given the above-mentioned potential dynamics, today’s savvy tech leader should next ensure the organizational technology foundation is strong and resilient, with an efficient and optimized set of business processes and tools to power the company.
If such larger-scale initiatives and transformation investments are in early-stage planning, there is no greater time than the present to fix and strengthen the existing foundational business processes before layering on more complex solutions or automating processes with technology. Procurement of next-generation solutions can be a game-changer for any organization, but before adding new tools, ensuring the current landscape is prepared for what’s to come is essential.
Drive towards business objectives. Link to end business value
Now that there is greater clarity to the over-arching business strategy and longer-term organizational plans, it’s time to think intimately about where and how to unlock real business value through new tech solutions and digital transformation initiatives.
Often, as technologists, we emphasize ‘technology’ and not the core problem and solution. Upgrading the technology stack and team skill set is important, but it should be done in a way that fits the overall roadmap and provides value to customers and stakeholders.
With this principle in mind, there can clearly be heavy advantages to reducing technical debt associated with legacy systems. Sometimes an objective could be less around broader business value and stakeholders, and more towards driving a tech landscape consolidation to achieve real cost savings for the business.
In any scenario, we recommend taking a holistic, goals focused approach to determine where IT can add the most impact to the organization with any new solution being envisioned. It should help achieve value at scale around some, if not all, of the following dimensions:
- Cost reduction – To what extent can a new software solution reduce the cost of operating (e.g., technology debt, improved cycle times and process through-put, overall productivity, employee health and satisfaction, onboarding, and turnover)?
- Revenue generation – How can any new solutions drive new revenue streams via new or existing customers? And can it drive elevated customer satisfaction, enhance product development, and help sharpen marketing campaigns?
- Risk reduction – Does your new software help the organization lower risk levers, which can have huge cost implications (or savings!) in areas like regulatory compliance, security, audit, and tax?
Now is the time to evaluate the vendor landscape
The urgency and pressure to act quickly and support the business will always be high. And sometimes bypassing strategic thinking and engagement across the C-suite can create a series of pitfalls that could hamstring an organization for the long-term – if activities and investments are not well aligned.
Now that you’ve gained deep clarity and alignment around the business strategy and medium-to-long-term horizon for the organization, a process can commence around evaluating what software products and solutions might be best for your objectives.
In part two of this series, I will go into depth on the tech procurement process and share specific tips that can help ensure you and your team make the best possible decision for your organization – and get the very most out of any vendor negotiation for new software products.