Enterprise Software Evaluation: A Framework
Enterprise software purchases fail at an alarming rate. Studies suggest that 50-75% of major software implementations don't meet their objectives. Much of this failure traces back to flawed evaluation processes that select the wrong solution for the organization's needs.
This framework provides a structured approach to evaluation that reduces the likelihood of expensive mistakes.
Phase 1: Requirements Definition
Document Business Outcomes
Before listing features, articulate what business outcomes you're trying to achieve. "Improve customer retention by 15%" is a business outcome. "CRM with automated email sequences" is a solution. Start with outcomes; solutions come later.
Map Current State
Document existing workflows, tools, and pain points. Interview stakeholders across departments. Understand not just what people say they need but how they actually work today. The gap between stated and actual workflows is where implementations fail.
Prioritize Requirements
Categorize requirements as Must-Have, Should-Have, and Nice-to-Have. Be ruthless: no more than 20% of requirements should be Must-Have. If everything is critical, nothing is—and you'll optimize for the wrong things.
Phase 2: Market Survey
Research the market landscape before engaging vendors. Understand:
| Factor | Why It Matters |
|---|---|
| Market Leaders | Often safest choices but may be overpriced or bloated |
| Challengers | May offer better value but higher risk |
| Specialists | Deep functionality in narrow areas |
| Emerging Players | Innovation but stability concerns |
Create a long list of 8-12 potential vendors, then narrow to 3-4 for detailed evaluation based on basic fit with your must-have requirements.
Phase 3: Structured Evaluation
Standardized Demos
Provide each vendor with identical scenarios to demonstrate. These should reflect your actual use cases, not generic workflows. Score each vendor against the same criteria.
Proof of Concept
For finalists, request a proof of concept in a sandbox environment. Have your actual users attempt real tasks. Observe where they struggle. This reveals usability issues that demos hide.
Reference Checks
Don't just call vendor-provided references. Find your own through LinkedIn or industry networks. Ask specifically about implementation challenges, ongoing support quality, and total cost of ownership versus initial quotes.
Phase 4: Total Cost Analysis
Software cost extends far beyond license fees. Account for:
| Cost Category | Often Underestimated By |
|---|---|
| Implementation services | 2-3x |
| Data migration | 50% |
| Integration development | 2x |
| Training | 40% |
| Ongoing administration | 100% |
| Future upgrade costs | Often ignored entirely |
Request detailed cost breakdowns from vendors. If they can't provide them, that's a red flag about their implementation experience.
Making the Decision
After structured evaluation, the choice should be clear. If it isn't—if you're debating between two similar options—choose based on implementation risk. The vendor with more experience in your industry, better references, and more realistic timelines is usually the better bet, even if their product scores slightly lower on features.
Features can be worked around. Failed implementations cannot.