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What No One Tells You About Software Failures

The Costs of Making the Wrong Software Decisions

Implementing new software can be a sweet dream or a beautiful nightmare. The right system can be worth thousands to a non-profit business. In this article, I discuss how the wrong system can potentially put your business in the red and make you see red at the same time.

5 Byproducts of Poor Software Decisions

Here are 5 of the more noxious byproducts of software selection failures.

Software & Service Replacement Costs

This is likely the most anticlimactic downside but definitely number one on the list. The cost of the software subscription itself and the services associated with the start up. If the selected software doesn’t properly meet the needs of the organization, the frustration will build so much that a change will be made. It may come early on or later in the use cycle, but ultimately the price of the faulty software selection must be paid. You also need to factor in early contract termination costs if a multiyear agreement was signed. So, check your contract before looking for alternatives.

Dual Software Costs

One of the benefits of shifting your software to a new system is being able to shed the cost of the old system. If you pick suboptimal software, then the transition will not go smoothly, and you will be left with a duplication of costs, including duplicate admin costs, backup costs, disaster recovery costs, etc. This can drag on far longer than expected. I have seen some nonprofits keep old systems in place just to keep old historical data which can’t be brought into the new system. This is due to space limitations or even lack of import capabilities of the new system.

Retraining Costs 

It’s obvious that training is a critical part of rolling out a new system to end users. Not training people initially and long-term properly is a recipe for a software disaster. If and when a nonprofit needs to replace a failed donor database or membership software program, they need to bear the cost of retraining their employees in yet another software platform. And, one big oversight is employee fatigue – when employees get overloaded with too many new systems, and have too short a time to absorb the changes.

Upgrade Costs

Sometimes choosing the wrong system doesn’t mean you first have to scrap the system to lose money. Rather you decide to upgrade it, potentially to a software that is expensive and the software product still does not properly meet the needs. And, you have to continue working around the problems. These costs just keep on accumulating.

A recent article on CIO opines:

An organization may select the wrong version of the software. After encountering problems, the decision may be made to upgrade to the next product level. With SaaS, this can mean paying for unneeded functionality just to get a particular feature. For software in the data center, this can mean a complete upgrade. Upgrading will cost you time and money, and it is better to make the right choice in the first place. Being forced into an upgrade is not the way to obtain value.

Customer and Employee Satisfaction Costs

A nonprofit can’t respond to their members or donors as well as they could if their software did its job properly. With the wrong system, you find it takes longer for a response to their inquiries. Events are delayed or money is not collected. If problems persist, slowly members can turn to the competition for education or a better cause. Either way, this is the perception cost.

Recently, I worked with an organization who made the wrong decision. And, due to the fact the system could not handle purchase orders, they had to resort to their old event management solution to solve the problem. And, an extra $2,500 dollars later….Not good!

From an employee perspective, there are many satisfaction costs. The extra work is one cost. But, the cost is also felt personally by the backers of the failed system. It can be anything from being denied a promotion to being fired.

Now there are many other notable costs, but these are some obvious and not so obvious ones to consider. Suffice it to say, you need a good requirements list and the fortitude to make hard decisions to get it right. And, an even a little prayer also never hurts either!

Contact us if you would like to learn more about our software selection process and need help securing the right fit the first time. Until next time, keep SmartThoughts in mind.

Free Membership Software Purchase Guide for Nonprofits


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