5 Steps to Budgeting for Software Purchases

Budget Planning & Forecast
February 12, 2021
5 Steps to Budgeting for Software Purchases

As we enter the fourth quarter of 2021, it’s time to review current business systems and the corporate budget to plan for next year. One of the best things to examine is your existing software and app subscriptions. Are your needs being met? Have you discovered any shortcomings with your existing systems? How much are those inefficiencies costing you?

Choosing software systems can be a complex process, as you need to consider more than just the dollars spent-- what a system costs, what the system offers, how long it takes to get the team running at 100% after implementation, and what it makes back in added revenue are all different questions.

We’ve created a simple process flow to make evaluating your software needs and making the proper budgetary allotments easier.

Examine Existing Systems

The first step would be to review what you have in place already. Here are a few questions we recommend answering:

  • How many total subscriptions or licenses do you pay for?
  • How much do your subscriptions cost overall?
  • Are there any areas where you are paying for multiple cheap solutions instead of paying for a single, robust, more inclusive solution?
  • Are there any problems left unsolved by your current software mix?
  • Are your current subscriptions updating regularly? Frequent bugs? Problems integrating data?

As you review these questions with both upper management and polling rank-and-file employees, you’ll be able to round out your picture of what is working well and what may be slowly leaking money.


Target Pain Points and Brainstorm Wish List

After evaluating what you already have in place, it’s a great practice to brainstorm what you wish you had.

For example, let’s cover a few pain points that the finance department commonly faces. These pain points may include:

  • Data inconsistency
  • Lack of traceability for data origin
  • Problematic information dispersion
  • Missing task automation
  • Poor tools for interdepartmental collaboration
  • High dependence on IT for using tools
  • Computing global sales through miscalculating multiple currencies

After this review, you’ll be able to create a list of features that you may already have covered while including desired solutions that you have yet to find.

Research Available Tools

The next step is to research the available tools and compare features, prices, and compatibility with existing systems. One of the best reasons to annually review systems is that new companies are coming live all the time, which may have more capabilities at a lower price than what you are currently working with.

Pricing

As you compare software prices, don’t get caught up in the quoted number alone. Remember to evaluate the amount of support, development, and features included in the price. You’ll also want to evaluate billing methods, like monthly subscription payments versus longer contracts. Do you need to buy any rights or licenses to get started? Will your current equipment handle the new software?

Also keep in mind that some more robust softwares will cost more money, but have a greater potential to save you money, or even increase your revenue.

All of these factors will need to be accounted for as you weight how much your current software is costing you, versus switching to another.

Features

User interface design is another key deliverable to software. Any software you purchase will need to have a clearly understandable and intuitive user interface in order to keep training time to a minimum and to be inclusive as possible to all tech backgrounds.

Will the researched software easily interface with common CRM and project management tools like Slack, Monday, Salesforce, and others?

What automation and internal project management capabilities does the software offer?

Finally, always read reviews, particularly from companies with a similar background and target market.

Choose and Implement a Solution

After considering your current systems, identifying the features needed to bridge your needs, and researching available options, you’re ready to make a selection. You may not get to this step until later into the quarter or even the first quarter of next year, but we’ll cover this process here as well.

Budgets don’t only need to account for the cost of software-- there need to be allotments for the time it will take to get your team up and running on new software. So as you create revenue goals and plan campaigns or product launches, you’ll need to remember that the group may work a little slower for the first few weeks or months (depending on how robust and pervasive the software is).

While any software switch should reasonably project increased revenue, make sure to set expectations according to the learning curve.

Evaluate to Make Sure the Solution is Profitable

The final step is to evaluate the solution once the company is up and running. Give the product at least a year where possible to allow for the learning curve, test the provider’s response to bugs and their commitment to rolling out updates, and move towards more advanced software functions.

You’ll see the impact of a great software in higher revenue and increased employee satisfaction and retention.

Ready to Make a Change?

With so many financial software applications available, it can be hard to find the right fit above the noise.

Cofi solutions prides itself in providing real-time scenario planning and performance management platform. Cofi combines the ves collaborative experience with a powerful metrics engine, unlocking data-driven decision-making across the organization.


Cofi software reduces time and costs by up to 10x, so contact us today for your personalized demo!