In today’s software marketplace, companies have a seemingly endless list of vendors. From the buyer’s point of view, the provider with the longest list of services is often viewed as the best choice. However, this is frequently not the case. Software shoppers — make sure you carefully evaluate the difference between applications and integrations.
Companies are choosing software providers for the wrong reasons and not achieving the results they need. According to a study conducted by 1E (via CIO Insight), more than $30 billion is wasted on software annually in the U.S. alone ($259 per desktop).
Why Is This?
In my experience, companies choose a provider with the most functionality, not the best functionality. When shopping for software, ask yourself if you’re shopping with a quantity-over-quality mindset.
Management leans toward solutions with a long list of applications that create a “centralized” platform. Many software providers that offer a variety of applications started with just one product. That product is their core competency.
At their core, software providers usually are very strong. Their entire business model was built around perfecting that core product. As companies grow, additional applications are built simply for extra revenue. The functionality of the applications is often bare and has the minimum requirements needed to add the applications to their list of services.
Standalone products or software that only concentrates on one domain are typically stronger, more robust and more effective for users.
You may be thinking: “Isn’t it tedious and inefficient to manage a bunch of different providers just for one function?”
To this I say, do not confuse applications with integrations. In fact, great software products often have a variety of integrations.
The difference is that each of those integrations is built by separate providers who are experts in their respective fields. In this scenario, you actually are getting the best of the best because you’re combining companies at their core competencies.
For example, a human resources applicant tracking system is a standalone product, but most are integrated with payroll providers, background assessment tools and interviewing platforms. This creates a full suite by combining the best provider in these three industries.
When companies move to one centralized platform, they immediately find that ancillary applications are not as strong as they need. I have also found that companies often pay more for centralized platforms and receive less functionality.
This brings me to this next thought: When looking for a software provider, are you looking for the best in functionality or best in marketing? Most times, companies sacrifice key capabilities for the flashy one-stop shop.
My recommendation is to find a successful standalone platform that offers direct integrations into the full suite you need. Finally, make sure your standalone products can grow with you. Ask about open APIs and XML feeds so that you can continue to add integrations to your suite of top vendors.
Why choose just one provider when you can have your company involved with many best-in-breed providers? Be smart when choosing your providers. Look for integrations instead of applications and standalone products instead of centralized platforms.