As we are working with potential clients during their selection process for proposal software or earned value management software, we often run into the misconception that tools from the large, legacy software vendors is a lower risk purchase. They focus on the vendor’s annual revenue, conclude bigger is better, and thus equals lower risk.
Is the size of the vendor’s annual revenue really the best way to measure the risk of going with one vendor over another?
Why Tools from a Large Legacy Software Vendor is the Higher Risk Choice
Large software vendors have stopped being software development companies.
The large software vendors have legacy software where they make minor enhancements on the edges such as adding a “new” user interface layer or creating add-ons you need to buy. Why? They are shackled with dated software technology and often poor database design that limits what they can do.
They have built-in “blinders” where every client’s unique business needs can magically be shoe-horned into their solution. Case in point: a client that wanted to build a library of product assembly data they could reuse as core building blocks for their cost estimates. The large legacy pricing software vendor chose to ignore the capability gap in their tool and offered their standard “solution” that clearly demonstrated they didn’t understand what the client wanted to do.
For other large software vendors, they have acquired smaller companies for decades and built a “suite” of disparate tools with different database designs and technology architecture. The different tools require a mixture of complicated interface utilities to “integrate” the tools. To fill in other gaps in the software, you must purchase add-ons for workflow functions or pay the vendor to write custom, one-off code, typically complicated SQL queries, to produce useful reports.
Once you are locked into their tools, their motivation is to generate the most cash with the least amount of expenditure possible. The result? Limited investment in the tools and minimal support.
Tools from a large software vendor is a higher risk purchase because:
- They have zero motivation to do any major enhancements, rewrite legacy software, or rearchitect the software to reflect current and emerging technology such as cloud computing. The impact to you? Slow performance, higher security risk, and dated technology with a limited useful life.
- They don’t keep their software up to date to match current industry and government requirements. Their product managers don’t appreciate the impact of their choices on the user community because they are not estimators or earned value management practitioners. Case in point: a product manager providing solutions that break fundamental earned value management best practices such as negative management reserve, negative undistributed budget, or earning at the wrong rate.
- They are slow to execute. They have layers of organization, process, and internal politics that greatly increases the time and cost to do anything. There is zero motivation to be innovative. Employees are rewarded for maintaining the status quo and are happy to simply collect their paycheck. Why else have a five-year development “road map” that doesn’t substantially change from year to year?
- Their focus is on increasing annual maintenance revenue. New software sales are a fraction of their annual revenue. Ask them to break out their numbers and it instantly becomes clear. When revenue doesn’t match expectations, the tools get sold to the next company looking to maximize the annual maintenance cash flow from the locked in user base. If you don’t like the new terms and conditions, you may be forced to do a rapid migration to another tool. A forced migration disrupts your internal process for months and often years.
Why Tools from a Small Software Vendor is a Better Choice
For small software vendors such as ProjStream, we have steadily grown over the last ten years because we listen and quickly respond to our customer’s needs. As a small software vendor, we are free to innovate. We are in the business of providing creative solutions that help our clients solve their difficult cost estimating and project cost management challenges.
We have worn the shoes of cost estimators and project managers. We know how hard it is to create and maintain quality cost estimating and project control time phased cost data. We also decided to do something about it. Our integrated software tools, BOEMax, EVMax, and MAXTeam, are the result of our direct experience and working with our clients to solve their business needs.
We designed our tools to help users create data-driven cost estimates and budgets easier and faster. We offer a competitive alternative to the large software vendor tools with built-in workflow, robust reporting, easy to use grid views, and schedule integration. Our tools share a common database using current technology. The underlying architecture for our tools is such that we are ready for cloud computing environments with shared servers, load balancing, and horizontal scaling.
As a small software vendor using an agile development approach, we often resolve customer issues in 24 hours or less. Customer enhancement requests are often implemented within days. We don’t assume we know everything about your business environment or our software is a perfect match. Our approach is to work with you, step through your process, and identify where enhancements to our tools can make a difference in how you do things. We then define short development cycles to quickly update the core product. Our goal is to support your process so you can create quality data easier and faster.
The Better Question to Ask
Selecting the right software tool for your company is an investment in the future. Instead of focusing on the size of vendor’s annual revenue, the question should be: “Which software vendor’s solution best aligns with my business needs?”
Which tool provides the support proposal managers, cost estimators, project managers, control account managers, cost or financial analysts, and others need to help them do their jobs more effectively? How can the tool simplify a process so users can create quality data and management has reliable data to make informed decisions?
Legacy tools from large software vendors may seem like the “safe” choice when in reality it is the high-risk choice. The tool is already outdated with a hodge-podge of add-ons or custom code along with minimal support that complicate life for the user community. That’s not an investment in the future. You are investing in a holding company masquerading as a software company.
You Do Have a Choice
You do have options to the large software vendors with legacy tools. Take a look at what a small software vendor like ProjStream can offer with innovative solutions. As a small software vendor, we can provide our clients with fast incremental releases using current technology, seamless updates, and built-in functionality. No need to purchase add-ons or a “suite” of tools.
If you need insurance regardless of the software vendor, ask for a copy of the software source code to be put in escrow. That way you have the source code should something happen to the vendor. You then own the software. You can then continue to use the software without disruption, and if desired, enhance it.
Give us a call today to schedule a demo of our tools designed with you in mind. BOEMax is our basis of estimate and proposal management tool, EVMax is designed for projects with EVMS contractual requirements, and MaxTeam is the perfect tool for project cost and resource management.