15 Top Questions to Ask Software Companies

This blog post was originally written for the Cn3D Construction blog. Cn3D Construction is now a U.S. CAD company, so please check back here at www.uscad.com/blog for more written articles from Jennifer Lanzetti and our new U.S. CAD Utah team.

In today’s built industry, you need a tactical and technical advantage. As anyone who has decided to engage in the technical side, you’ve experienced the woes of software purchase. Software is like the Wizard of Oz: there is always a person behind the curtains. Find that person and ask them these questions before you leap.

1)  How long have you been in business?

The first one is a softball, but still important. This will give you an idea if it is a start-up and the longevity you can expect. Adopting and implementing a new program in your office takes time and resources. It would be a great loss if the company you signed up with was not around the next year. Also ask if they are currently engaging in an acquisition negotiation. Many large companies purchase successful, smaller companies to either use their programs or eliminate them as competition.

2)  How many customers do you lose a month/year?

Getting an honest answer to this question sets the stage to how they will answer your other questions. This is a sensitive topic, but valuable for you to know. The average monthly churn rate (customers leaving) for cloud based software is 2% to 4%. If they come back with 5% or more, something is not right. While you are on the subject, go ahead and ask what their customer satisfaction rate is (95% is reasonable) and ask how they substantiate this information.

3)  What determines the software price?

Is it Per Seat, Per Concurrent User, Per Job or Enterprise License? It is ideal if they offer you a choice. The two most popular ways are Per Seat or Enterprise License. Per Seat is determined by how many total users in your business will be using the software. Per Concurrent User is based on a set amount of users that can access the software at one time (the program can be installed on 20 machines but only a maximum of 5 people can use the system at a time.) Per Job is usually an unlimited amount of users per project. An Enterprise License is usually calculated by your total revenue; giving everyone in your company access anytime for an unlimited amount of jobs.

4)  When I call technical support, who will I talk to?

Will you have to leave a voicemail, is there a dedicated person assigned to your account, is there online chat support or are they outsourced to a different country? The best answer is you have a team of specialists who take notes with each call you place. The next person you reach in an ongoing issue can read the notes and be caught up quickly. Software systems for this industry shouldn’t be so difficult that only one person knows your set up, or could help you.

5)  What types of on-site services and training are included in the purchase?

On-site trainings are ideal, but not always possible. Certainly find out if training comes free with your purchase or if it is additional. If it is additional, consider that when comparing against other companies. I believe if a company convinces you to try their product, the least they can do is teach you how to use it. Ensure that both service and support are built into your contract before purchasing. Beware that this is the area where companies make most of their profit.

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6)  Is there a guarantee of satisfaction with their software?

What if you do not like it? Sometimes unsatisfied users will expect a refund after deciding that it is not what they want. Once the software company receives payment for software, it can take next to a miracle to get a refund of any kind. Prior to purchasing, be sure to find out their return policy and number of days that you can have the software in your hands and still be able to receive a full or partial refund. Do, however, give the software a chance. Things that are new and different cause emotional reactions. Give the software 6 months to a year before hasty decisions are made. Most products are SAAS (Software as a Service) so signing up for 6 months or 1 year is possible.

7)  Have you been involved with lawsuits?

Depending on how deep you want to go, this question is more about how they answer it. They know that lawsuits (not mediations however) are available for public record and you CAN find this information out. Make sure to ask if they have ever filed a suit against a builder or if a builder has ever filed suit against them. The reasons behind this could be revealing.

8)  How many hours per month is your system down?

Remember that ALL systems go down sometime. Ideally, this is not for very long and not very often.  The average is one hour per year. If they don’t know, they are either not well trained or not honest. At the very least, he or she should be able to say, “I don’t know, but I can find out for you”. The bottom line is it better not be much more than an hour per year. If they are not stable, you won’t be either.

9)  Do you turn down, or not accept, customers, and if so, why?

You might think nobody wants to admit they turn down customers, but they do. They should, and you should too for the right reasons. If the software company says no, that would concern me. Especially software companies that have a product that fits a certain mold; detouring away from that mold is only going to cause grief and unhappy customers. If they say yes, then they are honest. If they tell you who, what type or why, you can more accurately determine if there is a match for you or not.

10)  What are your 2 primary user functions?

Every company has and knows who their target market is. If they tell you broad terms such as, “for builders”, this is substandard. The roles are who the system was designed to serve. You can’t be everything to everyone and be great at it. Try and steer clear of software systems that fit specific positions (project managers, superintendents) and focus on detailed answers like ‘medium-sized commercial construction contractors’ or ‘small volume remodelers’.

11)  What is your ratio of sales people to support people?

“What is your ratio of sales people to support?” They will likely tell you “A lot” or “You will never have to wait on hold”. If you think about it, a lot of support people is not a good sign. Why do you need so many support people? Why are they answering so many support questions? Is it hard to find answers or worse, is it not an intelligently designed software system in the first place? A ratio of 1 to 1 is great. Even 1 to 2 is okay, but if it is 1 to 3 or worse, that is probably not acceptable.

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12)  In an effort to meet your business needs how customizable is the system?

Perhaps you have a set way to draft your RFIs or Submittals Logs, can you alter the software to fit what works for you? The main reason for software is to get certain systems set in place so everyone executes a process the same way. But it is important that it is your way.

It will likely cost a little extra to customize software, so consider if you can change your set way of doing things. If not, customizations to the software should be no more than a 1/3 of the price of the software. Never forget that many times software companies will negotiate with you on customization.

13)  Will You Price Match Your Competition?

You actually do not want them to do this. Think about if someone asked you to do the same. You are not like an Audi dealership across town that is selling the same exact unit. In the case of software, there is no such thing as apples to apples. If your software company is racing to the bottom, is that a company you want to do business with? If you as a builder cannot adequately defend your price, you may have some issues. So do software companies.

If the sales person is an amateur, they will say “Yes”. If they are more experienced, but still not very good, they will say, “I will find out”. Only if they know they do not have to match their competition and they know (and they should know) they are providing more value than their competition, can they honestly and with integrity answer you, “No, we don’t price match our competition, but there are some very good reasons for that. May I elaborate?”

This does not mean you can’t ask for their best deal. Many software companies have affiliation pricing, show specials, or something to discuss.

14)  How often do you roll out new features?

As a built industry professional, you are their best resource. What you need the software to do is exactly what it should. So knowing how often features are tested and rolled out is a good question. Is it monthly, quarterly, or annually? The amateur sales person responds, “All the time”. Wrong answer. If there are that many new things that need to be added, I’d venture the original design was not very intelligent. If they are coming out with a release every few months, that is okay. Keep in mind that new features mean additional training for your staff. Have a system in place so when new features do come out, you can disseminate the information quickly to your team without overwhelming them.

15)  What are the typical hurdles that you can expect with your planned installation?

No matter what version the software is currently in, the software company should be well aware of some hurdles you may encounter during install. There should be plenty of documentation covering issues users encounter and be available to you.  If not, they aren’t paying enough attention. Keep in mind that the issues should be operator error in nature; if there are bugs they should be in the process of being resolved.

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