Want to know what the biggest mistake is when enterprise companies invest in software?
After all, enterprises can invest millions in monthly software subscription, without getting much in return.
Want to learn more? Read on.
Year after year, IT departments within enterprise companies are getting higher budgets to spend on software. In many organizations, these departments might spend hundreds of millions of dollars on buying and renewing software to increase the productivity and efficiency of their organizations.
For subscription-based software, organizations pay a monthly subscription fee, so the software turns out to be another employee on the payroll. With high spending on technologies, IT departments will have the highest payroll.
But are those new employees doing the required job? Sadly, that’s not the case in most of the cases. Let’s take a look at why that is.
In results-based organizations, functional managers set employee KPIs before hiring and monthly payment is defined based on a certain salary scale. These managers review employees on a monthly basis to ensure the return on the salary investment. If the employee isn't performing, then managers try to improve productivity. Otherwise, they might fire the under-performing employee. In results-based organizations, employees don't get a raise unless they start performing and getting results.
Sadly most enterprise organizations don’t assign functional managers to set the KPIs for software that they would like to purchase. So there’s no one to check the performance regularly, and there's no salary scale to define the monthly pay.
In the past, I’ve witnessed organizations spending millions of dollars on software that they don't need and they might never use. It's like a manager who would just hire more team members to keep them sitting idle in the office.
However, everyone will immediately discover the idle team members, but sadly no one is paying attention to the idle software. In the end, these software systems might be completely overlooked because they’re so hard to discover.
What also confuses me is that these organizations keep paying more and more on a yearly basis on these software systems as if they are worried to get rid of them or fire them. Or even more specifically, fire the software providers who get the money from these organizations regardless if the software is used or not.
When enterprise companies invest in software, they should immediately start looking at software subscriptions as an employee and set KPIs to track their performance.
They should then keep those that perform, but get rid of those that don’t. IT departments should not hesitate to fire under-performing software and remove them from their payroll.
I would also like to emphasize that software providers who get the money from regardless if the software is used or not, aren't your strategic partners as they will benefit when you might lose and they will drain your financial resources and might also hinder you from getting the right software.
And there’s a better alternative. At Exceeders, we’re building the right partner echo system where we only charge you for productive software. That's one of our core values and something we’re proud of. After all, why should you pay for something that doesn’t add value?
There you have it. Now you know how to invest in software so that you buy systems for your enterprise organization that actually make a difference.
Want to learn more about our software systems with guaranteed results? Take a look at our software store here.