Software Buying Process: Key Steps

Have you ever purchased software for your business, only to realize later that it wasn’t worth it? You’re not alone. 

According to Capterra’s 2024 U.S. Tech Trends Report, 58 percent of businesses have experienced this challenge. 

Some of these companies regret their purchase decision because the tool costs too much money, while others struggle to integrate new software into their existing systems.

Such scenarios are completely avoidable. This article details the essential steps in the software purchasing process. Understanding these steps and implementing them will help you align your requirements with your business needs and avoid costly mistakes. 

9 Key Steps to Consider When Buying Software

Here’s a structured plan to help you navigate the software buying process:

1. Identify Your Business Needs

Identifying your business needs is the first step in the software purchasing process. This stage relies heavily on input from stakeholders. 

Meet with your employees to discuss areas where software could improve efficiency. Your frontline staff understand the pain points in their workflows better than anyone else.

Consult your IT team too. They can make recommendations based on industry trends and competitors’ behavior. 

IT professionals also help you determine if the new software needs to integrate with or replace existing systems. After outlining your business needs, prioritize them based on their relevance to your operations or revenue.

2. Define Your Software Requirements

Once the business needs are understood, the next step is to create a detailed requirements document. This document should specify the exact functions and performance standards you expect from the software. 

Beyond specific features, compatibility is crucial. Conduct a thorough assessment of your technology stack to come up with integration requirements for the new software.

Another critical aspect to account for when defining software requirements is security and compliance considerations. Define any security or regulatory requirements the software must meet to protect sensitive data and ensure legal compliance. 

For example, software used in the medical sector should be HIPAA-compliant as those used in finance comply with PCI DSS regulations.

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3. Allocate a Budget

Answer the following questions to  allocate a budget: 

• How much are you willing to spend on a comprehensive software solution? 
• Is the cost worth the potential benefits? 

With a well-defined budget, you’ll find it easier to narrow your choices to solutions that offer the best value for money. Budgeting goes beyond the initial purchase cost but also ongoing expenses such as app credits, API calls, bandwidth usage, and more. Consider the expenses involved in setting up the software. 

Some tools may incur additional charges for customization or migration. Enterprise-level apps like Workato provide paid onboarding and training packages to help new users master their complex tools. When you take note of the full cost spectrum, you’ll know what to expect and avoid unexpected expenses that can slow down the purchase process.

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4. Research Software Vendors

Now it’s time to begin your search. There are lots of online software directories to check. These platforms offer a wide range of software options, user reviews, and ratings. However, it’s important to check credible ones to avoid being led astray.

SaaSGenius offers in-depth resources that explain how different software features work. We also go the extra mile of trying on some of these software before reviewing them. That way, you have detailed guides that will help you make more informed buying decisions.

5. Compare Your Options

With so many choices available, you’ll want to filter your options. A simple way to do this is to create a comparison matrix and assign weighted scores to different features. 

Using a comparison matrix that enables you to objectively compare software based on features, pricing, support, and more. Your ideal choice should be the app that excels with the highest weighted features.

You also have to compare software based on their integration flexibility. Check your integration requirements from step two to see which apps are compatible with your existing technology ecosystem. Compare support levels too. Ideally, you want software with different support channels especially, live chat options and simple training resources. 

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6. Request Demos or Trials

Many software services offer free trials or demos. Take advantage of these offers to get hands-on experience with the software. Demos and free trials allow stakeholders and end users to get acquainted with the interface, explore various functions, and feel how these functions streamline their workflows. 

During the trial period, test how the software handles real-life situations that matter to your business. Then collect feedback from users who participated in the software trial. Ask them to share their thoughts on how easy the software is to use, how well it performs, and if it meets their needs. 

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7. Negotiate Pricing and Licensing Terms

To negotiate pricing, you must first understand the software pricing structure. Some software solutions use a tiered pricing model where subscription packages are offered at different price points. Such pricing models usually have no room for pricing negotiations. But if your preferred software is sold on a quote-based model, you may find opportunities to bargain.

Check for discounts. You may find exclusive deals for certain countries or new subscribers. Coupon codes may also be available during seasonal offers.  Another way to get better pricing is to consider building long-term business relationships or bundling services. 

You could negotiate better prices and licensing terms by considering extended partnerships, bulk discounts, or adding other services or features.

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8. Get Approval from Relevant Stakeholders

Now you’re ready to purchase new software, you must keep stakeholders in the loop. Make sure everyone is on the same page regarding the choice of software. 

Explain the benefits of the chosen software and why it’s the best option for the company. Describe its features,  and how it can drive productivity and innovation

To gain support from key players, you need to justify the investment by showing them how the software will bring a positive return on investment (ROI). Providing projections or success stories from similar businesses can further strengthen the case for approval. 

And don’t forget, while you’re trying to promote user buy-in, you should anticipate questions or reservations from them and prepare to address them.

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9. Finalize the Purchase

Just before you make the purchase, cross-check the terms of the contracts and make sure they align with your company’s expectations. You must have prepared a clear installation/migration plan to help you transition seamlessly. This plan should define timelines, responsibilities, and milestones that serve as progress markers.

Depending on the sophistication, you may have to coordinate training and support resources to help users navigate the tool and start using its features efficiently. After installing the new software, come back weeks or months later to assess its performance and find more ways to make the most of it.

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Key Takeaways

Choosing the right software isn’t so difficult. Find out areas of your business that can benefit from automation or data insights, then search for tools with complementary functions. Shortlist the most capable ones and compare them based on their capabilities, compatibility, usability, and value for money. From there you can make a final choice. 

Remember to keep stakeholders in the loop, get recommendations and feedback from them, and make sure everyone is on the same page. 

For more information on SaaS pricing and pricing strategies, visit our SaaSGenius pricing site.