Choosing the right software can be a real headache. However, with the right information, this powerful tool can dramatically boost your business.
Just like a craftsman choosing the best tool for the job, you must also select software carefully. Why is this decision so critical? Because making the right choice helps you to make better use of all types of resources, thereby lowering your costs. Fortunately, today you can find software developed just for contractors. But before starting your search, make sure you narrow your focus and identify specific needs.
Consider your company profile: size, current and projected growth rates, computer hardware, and computer expertise within your organization. Your firm's size indicates the likely complexity of your accounting system and the number of transactions or subcontractors to track. If your company is growing rapidly, consider software that can expand to meet future needs. You might invest more initially, but you'll see savings in the form of longer useful life and thus fewer conversions or transitions to new systems later.
Don't force your software to fit the hardware. The purpose of hardware is to support the software; not the other way around. Buy the software first, based on your needs, then make your hardware compatible. Again, this may mean added investment, but you want an efficient system.
Landmine navigation. Remember: No software will meet 100% of everyone's needs. So you must find the program that most closely accommodates your procedures. The Sidebar notes some of the pitfalls.
How can you make this task easier? Shorten the selection process, and prevent unnecessary errors. First, visit others who already use systems similar to those you are considering. You may want to form a users group (including both electrical and non-electrical firms) that meets informally once a month. Consider the advice of your CPA, engineers, trade associations, industry associations, and trade publications, or visit the IEEE Computer Society Web site at www.computer.org for contacts.
If you're unfamiliar with setting up a computer system, find a consultant to assist in selecting the software and hardware for your specific needs. A local Value-Added-Retailer (VAR) may advise you at no charge if you express a strong interest in buying from that store.
Ask software vendors. They create the products and know what their own programs can and cannot do. Companies most familiar with your niche in the industry are most likely to understand your needs, priorities, and constraints. Best among these are firms who approach the sale of software from a consulting or advisory viewpoint.
Most programs run on Windows NT and Windows95/98. Thus, they have ease of navigation and compatibility with Microsoft Office. This factor alone can make implementation quicker, transition seamless, and daily operations easier.
Evaluation and implementation. A major factor in successful implementation is data conversion. This typically involves importing data from an old format to a new one. Although you'll want to avoid this tedious process, you may have no choice if you're going from an old system to a new one. Don't forget network compatibility, either.
Two extremes define the size and complexity spectrum. At one end, simple (and usually less expensive) programs have limitations that may not meet your future needs. Yet, they usually have short learning curves. At the other end, complex (and usually more expensive) programs provide greater flexibility and options. They usually, but not always, have longer learning curves than their simpler counterparts.
The complexity of your company's accounting system and the software you'll use to automate that system influence the time required to automate your accounting practices. Don't fall into the trap of thinking software will fix a bad accounting system, or a simple package will be best just because it's easy. You must look at the interaction of your accounting process and the software you intend to buy.Consider the whole picture and add up the costs and benefits of all the options. Once you narrow your choice down to three or four software programs, follow the hardware requirements from software vendors.
Proprietary versus integrated. Before Windows became so dominant, companies designed their own databases and programs; all of which followed the developer's own internal standards. The code was company property, thus, software formats were proprietary.
The alternative to proprietary software is integrated software. It's more open in its design. The strongest of these integrate with Microsoft Windows applications of any brand. Industry standards describe these programs as Open Database Compliant (ODBC), which means they can exchange data and some features with any other ODBC program. With these, you aren't at the mercy of one vendor and their proprietary product. Don't be fooled by a Windows look. Many vendors make programs that run in Windows, but they are still just proprietary systems that have a Windows-like interface. If you need to run in Windows, then buy only true ODBC Windows products.
Integrated or discrete databases. Can the program interact with other programs or databases? Integrated databases enable an entry, such as job costs, to flow automatically to other modules that need that specific entry. Does estimating flow into accounting, and do accounting and project management talk to each other? This saves you time and increases data accuracy. Discrete databases don't provide these benefits.
Integrated database systems help people work efficiently. Perhaps you'll eliminate the time required to re-enter estimates into your accounting system or be able to supply correct accounting information to a project manager on the job site while accounting updates a purchase order just submitted from there. Reducing re-entry saves you money and helps prevent cost overruns.
Modularity, flexibility, scalability. Consider whether to buy separate software for each activity or one program to handle combined tasks. If buying only one is more reasonable, then it should be more comprehensive and fully featured; but probably more expensive.
Flexibility refers to the user's ability to adapt forms or features to more familiar formats or the program's capability for customization. Obviously, these programs have a higher price because they deliver more options.
Like flexibility, scalability allows you to assemble essential components now and add others as your company grows. Scalability keeps your software current without buying features you won't use. Some systems even consist of a basic program with additional modules you can plug in later.
Software suppliers. Evaluate the vendors. Do they have the resources to keep up with your software needs as technology changes? Do they provide good customer support; even for older products? Do they develop other products you may need? Does the company provide customer service? What level of investment does the company make in research and development for new products or innovations for older products?
Just as you consider the value of a power tool to perform a job, consider the total contribution your new software makes to a more efficient organization. The firms who efficiently manage the massive data flows in today's world of contracting will handle more business and perform jobs better.
While software evaluation may seem tough, following these guidelines will help you do the job well. Clear knowledge of the tasks you want performed, how you run your business, and the options available to get the job done cost effectively set the stage for future success. Then it becomes a matter of choosing the products that fit your needs; now and in the years to come.
Sidebar: Four Traps to Avoid Tripping
Not considering Total Cost of Ownership (TCO). Consider the total cost to acquire and maintain the system. Include hardware upgrades, training, technical support, required third-party software, system stability, and user-friendliness. You often get what you pay for, so don't follow the false economics of buying on price alone. A low-cost option may be more expensive in a year's time than another that costs more initially.
More is not always better. Having tons of features does not make a program great. Make sure the features will provide value.
Not considering compatibility and interaction with other programs. If you are on a Windows platform, this is usually not an issue if your programs are ODBC-compliant. Ask the vendor what other programs users typically run on their PCs.
Not considering Operating System limitations. Windows NT has programming advantages Windows 95/98 (which is still DOS) does not, especially in regard to running VBA scripts against the Registry. If you aren't running NT and don't plan to upgrade to it, understand you may take a performance hit with whatever you put on your system; simply because of the complex extra programming required for Windows 95/98.