09/01/1998

Waiting for the Windows Version...Don't Wait!

Todd Zeldin

ACG Professionals, Inc.

There are several things you will never hear software vendors tell you when you are considering purchasing their applications. You will never hear them say that their product is deficient compared to their competitors' product. If it lacks certain functionality, the improvement is forthcoming in their new release. If you press them for a date of that new release, they often mention "Fall". Perhaps they purposely avoid telling you which year they will release their new version so that they can remind you that they are, in fact, on schedule with their release.

Despite the fact that we know not all vendors are not true to their word, we somehow want to believe them. We want to feel like we will be treated honestly and with respect. Yet, many of us have been in the position of postponing our decisions to adopt programs because we are waiting for the Windows version. I can understand waiting several months, especially if you have established a good working relationship with the vendor. Even a year is somewhat justified given the cost of implementing new programs, converting data from your legacy systems, and providing appropriate training for your staff. But last month I witnessed the greatest example of patience ever recorded in humankind. One of our clients told me that they were still using the same software they had been using since 1992, a DOS-based application, and that they were anticipating the first Windows release of this program later this year. The client called to find out if we also had problems running DOS-based applications on Windows 95, and if there were any suggestions we could make to assist them with this problem. After a slight hesitation, I suggested that they consider adopting a Windows alternative today, one that had been around for a while so that many of the bugs were already fixed.

Can you imagine an airline calling you, in advance, to inform you that your flight will be delayed for several hours, and that you should make plans to enjoy your morning before you depart for the airport? How about being told about the prices of the daily specials at a restaurant of your choosing instead of finding out when the bill arrives. Or ordering a Coke and being told that they only serve Pepsi (being from Atlanta, we are real sensitive to those circumstances)! Clearly we are all programmed to expect disappointments and surprises - and selecting software is no different than ordering in a restaurant, except that your success often hinges upon these critical decisions.

There are several things you need to consider when you contemplate switching to a new software program. One obstacle in your decision may be converting your data or retraining your staff. This may be both time consuming and costly. I would suggest that you fully evaluate the costs and benefits before you make your decision. We have found that many of our clients do a back-of-the-envelope analysis and never quantify the risks associated with not upgrading. Perhaps the company that was still employing DOS-based applications did this type of analysis.

While costs such as licensing fees, training and system implementation are relatively simple to quantify, ancillary costs like converting data are much more difficult to assess. For example, can you quantify the opportunity cost of misinformation? How much did that inaccurate financial report sent out to investors cost you, or the missed renewal option on the anchor lease? If you add up the cost of misinformation, you may conclude that the cost of not adopting new software is, in fact, higher than maintaining the status quo.

For those of you who continue to procrastinate and now find yourselves in a competitive disadvantage, let me recommend several strategies.

 

• If you are waiting for your vendor to release a Windows version, don't wait. More than likely, the first generation Windows product will contain several bugs. Even Windows 95, the most widely pre-tested program ever, had dozens of bugs that just recently were fixed in Windows 98. You are taking a significant risk by being the first to adopt a new Windows program, especially if this program is mission critical to your business like your accounting and property management systems. Remember that you need to be on the leading edge, not the bleeding edge. As a first adopter of a Windows release, you may find yourself worse off than had you continued using your DOS version.

   

   

• Consider your conversion costs before you adopt any new program. Vendors may suggest that you need not convert your legacy data if you upgrade to their Windows product, as they have a great link between the versions. Have the vendor demonstrate the transfer of your data into their new Windows product. If they cannot showcase this for you during the demonstration, anticipate conversion costs in addition to licensing fees. Sometimes your cost to convert to the Windows version of the product you are currently using is the same or more than if you had converted to an entirely new product.

   

   

• Include other costs associated with updating your software. Too often firms consider only licensing fees and do not focus on costs to upgrade hardware, train staff, and customize the product and reports. The last thing you want is to convert to a new product and then inform your staff that certain reports that they were accustomed to seeing are not in the new system. Remember that implementation and conversion costs may exceed licensing costs and should be outlined prior to licensing any software.

   

   

• Consider outsourcing the function of converting your data. Expert consultants can be invaluable during the conversion process, especially if they have previous experience on similar projects. Require consultants to work on a "not to exceed" fee schedule so that you have a cap of your costs. Consider designing a fee package that incentivizes the consultants to complete the project ahead of schedule. And always dedicate internal personnel on a conversion project, as you are the ultimate users of the information. You will be better served if you think through the conversion process and evaluate the risks and rewards before taking any action.

   

If you would like to address any interests, you may contact Todd Zeldin at tzeldin@acgpro.com.