Afraid to Buy Software From a Small Company?

OK, you've found what appears to be a great software product that solves a critical business issue (and at a great price), so you talk to a "decision-maker" - this might be your boss, the CIO or maybe a regional controller. You present some of your findings (based on a "live" demonstration) and before you can finish, they want to know everything about the software vendor...not a bad thing, it's part of the due diligence process.

Unfortunately, because the software vendor does not appear in Gartner's "Magic Quadrant" or is not considered a "Top 5" player, your idea is quickly dismissed because "...they're too small and therefore too big a risk for our company." You feel a little intimidated; maybe even embarrassed that you suggested the idea and are thinking this might be the last time you stick your neck out.

Obviously, you don't want to play high-stakes poker with your employer's money - so is your idea that crazy (simply because it's a small software vendor)? If the software can truly address your core business requirements, ask your decision-makers to consider the following 8 reasons when evaluating software vendors:

• Personalized Service, Care, and Support (for the life of your software). When you purchase software from a smaller organization, you are buying a long-term relationship that isnurtured after the sale. You may not receive that "whiz-bang" PowerPoint and handsome binder containing all those marketing glossies but you will receive attention to detail and a solution tailored to your business needs...and those needs will change over time, so it's critical that your vendor stay closely aligned and connected to your business.
• Better Value. Small companies have less overhead and do things more cost-effectively. This reduction in cost translates to a better price for the buyer without sacrificing the quality of the product or the quality of service. The Internet has leveled the playing field and allows small companies to provide low-cost innovative products, services, and support. Research and development is laser-focused on adding business value using the most current technologies.
• Faster Response. When you need it quickly, there isn't a complex maze of procedures and employees to make it happen. The decision-makers in a small business are just a call/email/text away!
• LESS Risk. Your due diligence will determine whether software can meet your needs. Concerned about whether the company will be around next year? Consider what's happening at the high-end of the software industry - consolidation (mergers and acquisitions) resulting in the unknown future or direction of software products. Ask for references; many small businesses have Fortune 500 clients! Choose a small company with a well-architected product that uses current technology/standards and ask to escrow source code - in the worst case scenario, you end up with an "open-source" solution!
• More Influence (think "enhancements"). Your changing business requirements have a greater probability of being serviced by a smaller company and more quickly. Think about that large vendor built through mergers/acquisitions. Think there's any chance your idea will be implemented? How long will it take that large vendor to change a product(s) that has multiple versions being supported (and in different technologies)? Your business will change...can your software keep pace? A small software vendor can enhance its product quickly and economically to satisfy your real-world business needs.
• Better Technology Faster. A smaller company can react much more quickly to changes because modifications to their product are less complex. Change is not a four-letter word. When driven by business needs, change improves the product and benefits the client. Change is fast in a small company; a well-architected product and one version of software is an environment that large companies only dream about.
• Transparency. A small business can't hide under a corporate umbrella. When there are issues, there are no excuses, and you have immediate access to the decision-makers in a small business. Losing a client is not considered an option in a small business.
• Flexibility. A small business is not constrained by corporate rules and policies; a small business fosters an environment of creativity/innovation. The basic premise is not to satisfy the demands of shareholders but to find a long-term business solution that benefits both the provider of software/services and the client.

The above list is provided to stimulate discussion. Depending upon the size of your organization, you may have a formal process for selecting/purchasing software products and you may end up choosing a product from a large software vendor...my goal is simply to ensure your selection is made for the all the right reasons!