8 Questions To Ask, And Answer, Before You Invest in New Software

October 10, 2017

Researching software implementation for your business can be daunting. There are a plethora of software providers offering their services to growers, all with various packages and modules at assorted prices. And they are all vying for your business.

Software provider research and implementation may seem overwhelming at first, but doing your homework will pay off in the long run. Imagine if you spent the time and money to implement a new software package only to find out that the software doesn’t support your business. It is painful to have to start the process all over again.

Here are some of the questions you should asking (and answering) prior to making an investment in software.

When Should You Purchase Software?

As a general rule for growing businesses, when your business approaches the $1 million in annual revenue, it is a good idea to consider software implementation. You don’t necessarily have to purchase an entire software package all at once if expense is an obstacle. You can start by purchasing individual modules.

Create a budget for your software expenses. When you do, make sure to include not only the initial price of the package, but the all-too-necessary ongoing support and maintenance costs.

How Much Should You Budget for Annual Software Expenses?

There is a somewhat simple answer to this question. If you are running a million-dollar business then you should invest 4% to 6% of your annual revenue in technology. This amount may fluctuate year-to-year, but will always remain a part of your annual expenses. Your software package is not a one-time investment.

Are There Alternatives to Purchasing a Full Software Package?

Software implementation doesn’t happen overnight, even if you do have limitless investment funds. Plan on building upon your software up over time. Any implementation that helps you lower your costs will help you grow your business.

If you are working on a limited budget, focus on order fulfillment during your first year. In your second and third years, begin adding additional components such as mobile apps, which tend to be less costly and enable your team to drive the software without having staff piled up in the back office. As time progresses, incorporate online availability and orders, racking optimization, mobile pick and ship, value added, and dashboard reporting — all useful and affordable tools for streamlining your business.

To read the full article online, visit Greenhouse Grower Magazine.