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7 steps to choosing software that is right for your business

7 steps to choosing software that is right for your business

Following these 7 steps to software selection will help you make a good decision when choosing software for your small business!

Published on
July 2017

Choosing software is not a quick or easy process. Many small business owners and managers know they need a new system but are put off by the number of competing products, the amount of time needed to evaluate each one, or a fear of choosing the wrong solution. We know you can’t afford to make a mistake, in small businesses we just don’t have resources to spare, so it’s important to get it right first time.

Following these 7 steps to software selection will help you make a good decision when choosing software for your small business!

1.   Know your objective (or “What’s the point?”)

This first step in choosing the right software tools for your business is knowing what you want the software to do.

You cannot be successful in your software search unless you know what you are looking for!

We can often break this down into three areas:

  • Know the process. What must the system do?
  • Know the pain points. What problems must the new solution solve?
  • Know it’s value. What would a solution be worth? Can you quantify the strategic benefits of the new system, or the costs savings, or the time savings?

It is import to involve your team early on. Bring in anyone who will be dealing with the system at this point. They will know better than anyone the problems associated with the current way of working. They’ll also need reassuring that the new system will actually be better than the current way of working. The best way to calm those fears is to ensure that their needs make it into the requirements list.

2.   Create a list of software requirements

Having established why you need the software, it is time to get a bit more specific. If you have a large team, it may be worth involving just a few “champions” for this stage. It is important that everyone has a voice, but trying to involve every individual is not manageable. Ask for a few volunteers to help you define the system requirements. These “champions” should be regular system users, be well liked and assertive enough to speak up in group discussions.

With your champions, you’ll want to put together a comprehensive list of requirements for the new system. If you find discussions getting off track, focus on the purpose of the system that you set in step 1.

Important requirements to capture are:

  • Functional requirements – what do you need the software to do. It is easy to take things for granted at this stage, so take your time and list everything.
  • Usability requirements.  By “usability” I mean ease-of-use. Think carefully and honestly about the skillset of your own team.  Are they going to be comfortable using a command-line tool, are they used to navigating using keyboard shortcuts, or are they mousers? These criteria are difficult to articulate, but don’t lose track of them!
  • Technological preferences.  Do you want a cloud-based system or on-premises?  Windows or Mac?  Should the data be housed in a SQL Server instance, or Oracle? You get the idea.
  • Budgetary requirements. Using the work we did in step 1, now set a budget. What can you afford to pay, and what is the system worth to your business? At what price would the system actually save you money – i.e. provide you with a Return on Investment (ROI)?
  • Reporting requirements.  Will you need reports from the system? If so, what needs to be included? Should these be emailed to you, or presented as dashboards?
  • Scalability.  What volumes do you currently experience? Do you expect these volumes to rise over the next 2 to 5 years?
  • Vendor requirements. Record any requirements of the supplier themselves. Perhaps this includes the vendor’s roadmap for future development, current user volumes, years in business, or support response times.

Now go through the requirements and rank them on a scale from “Fundamental” to “Nice to have”. Unfortunately, it is unlikely you’ll find an off-the-shelf package that hits every one of your criteria, so think now about which ones you’d be happy to compromise over.

3.   Start searching for relevant applications

At this point, you want to create a long list of all possible software packages. It’s best to put them into a spreadsheet, ready for comparing later. At this point though, don’t waste time evaluating the systems, just list them all out.

Of course, you could search Google for the type of system you need. Remember though that Google’s ranking is not an indication of how good the software is! Just because the company’s marketers are good at their jobs – and can get their website at the top of Google’s results page - doesn’t mean the system will be a good fit for you!

Try software comparison sites instead as a way of listing all the contenders. There are quite a few out there:

Each site has its strengths and weaknesses. AppInsight is our own software directory tool and includes shortlisting and comparison features for registered users, but is quite specialist. We also find G2 Crowd useful, especially for the evaluation steps that come later.

If you work in a niche industry, you may also find supplier listings in a trade magazine or website.

4.   Start excluding solutions

Now that you have your (very) long list of contenders, it’s time to start whittling it down.

Your aim in this step is to identify unsuitable entries as quickly as possible. There is no point wasting time evaluating a system that will ultimately turn out to be unsuitable.  To do this go through the list one at a time and concentrate on a few simple criteria from your requirements list.  A good place to start is with:

  • Technology preferences. If it only works on Macs and you are on Windows, great, that’s one less to look at. If it is on-premises, and you’re looking for a cloud-based solution – cross it off the list.
  • Budget. If it is too expensive, make a note of the price and move on.

You can quickly exclude systems on these two criteria without wasting time on demos or trials. Ideally, you’ll end up with a short list of between say, 5 and 10 software systems.

If your list is still too long, then identify a few criteria from your “Fundamental” criteria that may be unique or unusual and reassess the remaining contenders using these. What classifies as “Unique” criteria will depend on your needs. From your list so far, you’ll probably have a good idea of what an average system looks like. Look for one of your requirements that is not included in the average offering. This process should shorten your list to a more manageable size.

A word of warning though; it is worth making a note on your spreadsheet of why you’ve discounted each package. If your requirements then change, you can re-include them later. For example, you may have to increase your budget later in the process, and you’ll want to re-evaluate any system that falls inside your new budget.

5.   Start trialling your selected software

This is the most time-consuming part of the process. Because it takes time, you need to be smart about your evaluation process. Concentrate on assessing the software against your criteria. Don’t get side-tracked in to looking at all the features, just the ones that you have already identified that you need.

requirements matrix will help with this. To create a requirements matrix in a spreadsheet, list all your short-listed solutions down the first column, and all your requirements across the first row. Then tick off the requirements as you evaluate each solution!

Trialling software is the best way of assessing it against your usability criteria. Whereas a demonstration from the vendor is the best way of assessing functional and reporting requirements. Ideally get both. Start with the demonstration and then take out a trial.

When arranging a demonstration, make sure the demonstrator knows your functional requirements. They can then demonstrate just the functions that are relevant to you. It may be useful to provide a script so that each vendor demonstrates the same functions in the same order. This’ll make it easier for you to compare systems.

If you are comfortable with the functionality of a product, then concentrate on usability during your trial. According to Jakob Nielsen, usability covers such things as:

  • “Learnability”. How easy will it be for first-time users to complete basic tasks? Are the functions obvious (or intuitive), or will you need extensive training?
  • “Efficiency”. How quickly can users perform tasks? Are there lots of clicks, or are keyboard shortcuts available?
  • “Memorability”. When your users come back to the system, say to perform a monthly task, how easily will they be able to on?
  • “Errors”. How robust is the system in identifying and preventing errors? Go on, try to put some ludicrous values in fields and see how the system copes!
  • “Satisfaction”. Don’t underestimate the “look and feel” aspect of your evaluation. After all, you or your team may be using this every day –are they going to enjoy using it, or find it frustrating?

Make some notes, and take screen shots during your trial. Once you’ve tried two or three systems they will blur into one! I found it useful to take screen shots of the same functions in each system and then drop them into a Word document. Don’t forget to label your screenshots so you know which system is which.

6.   Do your due diligence

You will probably have a good idea of which system is “winning” by now.

Having selected (or almost selected) a product, it is now time to do some homework. This is where we address the vendor requirements that you listed earlier. If the product is sold through a partner or reseller program, you’ll also want to investigate the reseller.

7.   Start negotiating

This is where you start to finalise the finer details of the system. Make sure you address the business issues, such as implementation time, support levels, service availability and payment terms – not just price.

When looking at final costs don’t forget to include all likely costs: such as licence, support and implementation costs.  Some cheap cloud-based tools don’t have much room to manoeuvre on price, but other vendors, especially those using a reseller network, will have significant flexibility in this area. It’s always worth asking!


Following these steps will help you make the right decision next time you are looking for a new or replacement system.

One final warning, this article has been about software selection. Choosing the right package alone doesn’t guarantee success. Don’t forget to allocate time and money to managing installation, integration into your current business and staff training, as well as ongoing monitoring and maintenance.

All the best with your project!

Of course, we’re also available to help you with your specific project. We’ll help you define your requirements and do the time-consuming searching and evaluating for you. We can manage implementation and organise training… if that sounds appealing, get in touch!

Related service

Business software selection service

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Software selection solution sheet

About the author

About Middlestone

Middlestone Business Analysis helps small businesses achieve more with their existing resources. We help reorganise operations, automate tasks and install customised processes and systems to keep small businesses organised and to speed up administrative work. To learn more, visit our services page.

Follow us on LinkedIn or Twitter.

If you would like a free initial consultation, or you are interested in an independent business review, please use our contact form.

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