You need to make sure you select and use the correct software. A good team combined with useful tools and right resources can help your company succeed. However, there will be a price to pay if you use the wrong tools for your business. These are the five negative effects of choosing the incorrect business software:
Company Loses Revenue
ERP, CRM, and software packages are very important to an enterprise. In 2000, Nike invested $400 million in a software package, but a software upgrade glitch caused an estimated $100 million loss and dipped their stock price. In 2004, HP attempted to prepare for the problems of a new ERP rollout, but still found that 20% of their orders were not going through. By the time they resolved the issues, they had lost $160 million along with many customers.[i] Such mistakes would have caused SMEs to go out of business. If you think that these failures are rare, you thought wrong. Gartner has found that about 75% of ERP implementations were doomed to fail[ii], so make sure yours isn’t one of them.
The problems that occur because of wrong business software are not only financial. Remember that the main purpose of software is to ease the work of the company. Choosing the wrong software has the opposite effect and leaves you with more work. Software should streamline the flow of your work and simplify, not further complicate operations. If you need to perform more actions or take more steps than before, employees may abstain from using the newly purchased software.
Wastes Time and Energy
You need to maximize your time, so you shouldn’t always tweak with the ERP or CRM to make it work. Software problems will leave you stuck and delay business processes. Software problems take extra effort to resolve and repeatedly contacting the software vendor for help decreases the time for other tasks. You could also lose loyal customers and gain a bad reputation through word of mouth. Worst of all, your competitors will benefit from your problems and you will lose valuable ground.
One unwanted side-effect of using the wrong software is that it forces you to go back to previously used software. As the current software does not work, you have to be at the mercy of old vendor to perform business operations. This is troublesome and worrisome. It is also a downgrade and leaves you lagging behind your more advanced competition. Older versions of software may not be suited to the current market and may be missing key components. As a business, you want to work with the latest and greatest tools so you can generate the most revenue.
Reduces Team Spirit
Some costs of choosing the wrong business software, such as psychological effects, aren’t measured in numbers. Software crashes or poorly designed software severely dampen team morale. The team feels like it has used its time and effort to try implementing an incompatible software. This will no doubt frustrate them and could even lead to mistrust. Clarify doubts and make sure you purchase the proper software before using it.
Some of the specific costs of the wrong software include :
- License Cost
- Training & Implementation Cost
- Customisation Cost
- Upgrade Cost
- Time Cost
- Unqualifiable costs such as Employee attitude & Confidence, Business disruption, Loss of customers & Opportunities, Opportunity cost due to loss of benefits that the software would have offered etc
So how can You Avoid these Mistakes?
You should purchase from reputed vendors with dedicated support teams, for lack of communication or delayed replies may lead to misunderstanding with the vendor. If they aren’t clear on your needs and you don’t understand the software, you’ll end up nowhere. Sometimes, members of your team will give different feedback about the software, causing internal conflict. You should make sure everyone knows their role and follows it for a smooth purchase and implementation.
Do read our Blog titles “ 11 Mistakes SME’s make while buying Business Software”
Still having Difficulties? SoftwareHunt is here to Help.
We at SoftwareHunt have decades of experience of finding the right business software for SMEs. We have no sales targets, allowing us to offer unbiased advice on whatever ERP fits you.
Using the wrong business software will prove costly for everyone. That’s why you should contact us to discuss all your software needs. You have nothing to lose and everything to gain!