Thought leadership from Rodger Smith, CEO and Founder of DirectScale:

  • Why choosing the right partner is so critical
  • Choosing between a provider and in-house development
  • Questions to ask your provider

Having been in and around the industry for many years as both a successful distributor and now as a supplier, I’ve seen companies struggle with the decision to choose the right technology or software provider. There are many reasons for this of course, but there are a few key things you should look for and really pay attention to as you go through your selection process. It’s never a guarantee, but your goal should be to make a choice that works for you not only now, but ten or twenty years from now as your company scales globally.

A quick argument for an outsourced software provider vs in-house development

Time and again I’ve seen companies partner with the wrong solution for a distributor back office and genealogy and commission system. They end up outgrowing that solution and are faced with the costly decision to either migrate to another provider or spend resources (money and focus) building a platform in house. Since the previous experience with an outsourced partner was not a good one, many choose to build a solution in house and end up spending millions in the process. Two years later they’re in maintenance mode with innovation suffering as a result. They realize they have an outdated platform and they’re right back where they started–don’t get caught in this trap!

Choosing the right partner is so critical.

Why choose a software partner vs in-house?
  • Agility- The right provider will be able to implement and deploy much faster than you can in-house. They have done this many times…it’s what they do…and the whole company is geared towards doing it efficiently. Your company should be focused on your core competency…what you do best…which is likely NOT building software.
  • Savings- You will save time, money and resources using a software partner. You will pay the right software partner a fraction of what it will cost you to build and maintain in house.
  • Relevance and Expertise- Tech and software are quickly evolving and can be tricky beasts. The right partner can stay on the cutting edge of these trends so that your software and tools stay relevant in the market. The right software provider is laser focused on their niche. Although not perfect, they won’t be distracted by other corporate priorities. The right partner will also understand the nuances of the industry and be able to solve for any specific pain points you may have.
  • Competitive Advantage- Today, more than ever before, the user experience of your distributors and customers matters. You need to look good!

Questions to ask during vendor selection

  • How well does it accommodate our business model? What types of clients currently use your software?
    • It’s important to find a platform that is proven running many different types of direct selling models, especially the one you plan to use. Get actual client referrals so you can get a candid view of any particular vendor and how they operate.
  • What is the total cost of ownership? What costs should I expect after implementation (besides licensing)?
    • It’s difficult to compare initial bids for implementation because of the vast differences in business models among software providers. To truly compare, you need to make sure that you’re considering costs for periodic professional services or development after implementation along with the initial up-front costs.
  • Is it configurable? Can I update/ change/ configure things on my own? What pieces will you need to change for me?
    • This goes to total cost of ownership… “what can I do on my own that I won’t have to pay a professional services team to do?” Software that leverages current technology and has a well-designed admin and UI will save time and money…and make it easier and more delightful to use.
  • Are you a SaaS platform?
    • No software provider in the industry should be maintaining and hosting clients on their own hardware. Cloud providers are proven to be more reliable and safer with data privacy. And, when set up right they can scale much faster.
  • Does it work beautifully on mobile?
    • Really the question should be, “How do you develop for mobile?” Any software that isn’t easy to use on mobile, isn’t worth looking at. Business is done today from our hand-held devices. This is especially true in many international markets. Another note…native mobile apps are an option but you want to make sure that the standard marketing and back office experience is built for mobile.
  • Is your software extensible? Meaning, can I do custom development on my own…and if I do, am I locked in on a certain version of the software or will I continue to get regular updates and improvements?
    • Extensibility is an important part of any good SaaS platform. It means that individual clients can have their own custom pieces unique to their needs without affecting the core platform or the ability to receive future product updates and/ or platform upgrades. Oh, and those updates should be included in your licensing costs…the platform should be versionless.

Conclusion

This is a big decision…one that will have a great influence on your business now and in the future. Ask questions, do your homework, get to know the people at the software provider…make sure you are going to enjoy working together…life is too short not to enjoy it! 🙂   Rodger Smith, CEO and Founder, DirectScale directscale.com