The Ultimate Software Vendor Evaluation Guide

If you’ve been tasked with selecting and purchasing software for your small business, you may feel overwhelmed by options. Which features do you actually need? What services and support options will be best for your team? Should you be searching for a stand-alone app or an integrated suite?

The good news is that you’re not alone in your confusion: 42% percent of buyers in our 2024 Tech Trends Survey struggle to identify the right software for their business.* The not-so-good news is that 60% of buyers regret a purchase they’ve made in the past 12 to 18 months.

This guide will help you prioritize the right features and services—as well as long-term ROI—so you can feel confident in your investment. Even better? We’ve included a free downloadable software comparison chart to help you weigh your options and make an informed decision.

Considerations to make when evaluating software

You wouldn’t buy stock without researching its long-term viability—software is no different. Software evaluation best practices require careful consideration and analysis of the following criteria:

• Your business needs: Every business is unique; a freelance graphic designer will need very different accounting software than a construction company. Before evaluating a software package, you must know what you’re looking for.

• Vendor product lines: Some vendors offer only a single all-encompassing product, while others have a range of specialized options for different industries and processes. A thorough examination of the differences between products will ensure you get exactly what you need—no more, no less.

• Future technology: This is, of course, hard to predict. But software is a years-long investment, and anticipating technological advancements—and which ones your potential vendor will utilize—will extend a product’s lifespan and make upgrades less frequent.

Our free downloadable software comparison chart, pictured below, helps assess these software evaluation criteria for each prospective vendor by tracking functionalities, training and support offerings, deployment options, and hardware and mobility. We’ll walk you through each of these in the next section.

Essential software characteristics to evaluate

Functionality

These are the features of the software—and that can mean many things. To simplify, it’s best to break it down into two types:

• General functionality is more abstract, harder to put your finger on, and can’t be carried out with the click of a mouse. It covers things such as artificial intelligence, machine learning, integration, speed, and general reliability.

• Specific functionality is a particular task or capability. Forecasting, payroll management, bills of material—these are concrete software components that help carry out a specific business process.

Depending on your business needs, some features will be a requirement, while others will be “nice to have.” Distinguishing between your organization’s needs and wants will assist in narrowing down prospective vendors to a shortlist comprising only vendors that offer your required features.

Training and support

In a perfect world, you’d be able to download a piece of software, hit the “install” button, and move on with your day. In reality, you’ll probably need some help implementing the software and learning how to use it, especially if you’re a growing business with multiple users and complex workflows.

Luckily, most vendors offer some form of training and support, ranging from online FAQs to large-scale implementation assistance.

When evaluating a vendor’s training and support options, consider the following:

The value of a vendor’s training and support offerings will depend on your organization’s size and structure. Establishing your optimal support framework before browsing the market will help you identify the most viable solutions.

Deployment

How you choose to deploy your software depends on your business size and requirements. When evaluating deployment options, consider the following:

• On-premise software is hosted and maintained locally, usually by a business’s IT department. This deployment option lends itself to a greater degree of ownership—and therefore customization and security—making it an attractive method for established businesses with the resources to handle such an undertaking. On the flip side, this can delay implementation time, complicate critical software updates and other maintenance, and handcuff businesses that crave future agility.

• Cloud-based deployment is hosted and maintained by the vendor or outsourced to a third party, and the system is typically accessible through any device with a web browser. Though less customizable, cloud-based software typically offers greater stability and security—especially for small businesses that lack the staff to manage data internally. And because it’s lighter than on-premise options, it usually takes less time to implement.

• Hybrid deployment includes a mix of on-premise and cloud-based software—basically, cloud software hosted on a business’s private server. This will likely appeal less to small and midsize businesses and more to enterprises seeking both the accessibility of the cloud and the customizability of on-premise.

Hardware and mobility

In the 21st-century software arena, mobility reigns supreme. The overwhelming presence of smartphones and the internet of things (IoT) precipitated new and better forms of digital communication, giving businesses a flexible companion to desktop systems. Such considerations might have been optional in years past, but today, they’re essential.

When sizing up a vendor’s hardware options, consider the following:

• Operating system is the software running on your desktop computers or laptops. Odds are, your business uses either macOS, Windows, or Linux—and there are plenty of software options available for all three. However, the underlying design of these three operating systems differ drastically, which means vendors must build different versions of their software for different operating systems. In other words, be sure to verify OS compatibility before you buy.

• Mobile compatibility comes in two forms: a stand-alone mobile app and mobile browser accessibility. Some vendors offer full functionality through a mobile browser such as Chrome or Safari, while others are limited to only essential or specialized tasks—and the same is true of mobile apps.

• Internet of things (IoT) integration includes mobile access, but it goes much further. Now, virtually any internet-enabled device is software-compatible, be it a smart TV or Alexa or the radio in your car. While the full potential of this technology has yet to be unleashed, finding a vendor that prioritizes IoT could pay dividends in the future—and extend the life of your software investment.

Things to keep in mind regarding pricing

Now that you’ve identified what you’re looking for in a vendor, you can begin to narrow your options down to a shortlist. But pricing can be a tricky game to play, with numerous variables that ultimately affect a product’s price tag. Here are some things to keep in mind:

Pricing models for most software types include either a perpetual license or a subscription.

• With a perpetual license, businesses pay more upfront to acquire the software license indefinitely.

• The subscription model consists of a smaller recurring fee (typically paid out monthly or annually with a discount).

• Free and open source software is also an option, especially for businesses with extensive development expertise, though out-of-the-box functionality is usually less than paid products.

• Some vendors offer a free trial of their software that you can use for a specific period. If a trial is not offered, be sure to set up a software demonstration with that vendor. 

Price ranges for many markets hinge on the desired number of users, with packages generally ranging from starter (around one to four users) to mid-range (around five to nine users) to premium (10 or more users) plans. The actual price of these options will, of course, depend on the software application. The table below describes some cost types to consider.

Next step in the software product evaluation process

There’s a lot to think about when it comes to software evaluation, but once you have a better understanding of what functionalities as well as support, deployment, and mobility options work best for your business, you’ll have a much easier time creating a shortlist.

Our software comparison chart is an excellent resource to have on hand throughout the process. By summarizing the different software evaluation characteristics we’ve discussed in this guide, it can help with a more practical software assessment.

Our industry-leading software advisors are another great resource. For a free phone consultation, call (855) 998-8505.