Independent software vendor (ISV) selection – A critical step to profiting from your ERP investment 

Each ISV offers its own set of technologies designed to meet the unique needs of businesses, ranging from cloud vs. on-premise products. Many companies are looking for hybrid and/or multi-cloud solutions to “embrace functionality such as data residency standards, enforcement and legislation, low latency, and low cost that improves mobility, and provides enhanced protection, enhanced user interface, and ubiquitous access’’. 

Blockchain, security, and API are some of the many additional features available today that you can explore to help your business operate more efficiently and transparently. Since there are many solutions to choose from, it’s vital to ensure that when selecting an ISV, their technology empowers your business to do what you want it to do inside your ERP, not just for today but for tomorrow and beyond.  

Introducing a new application to your system can come with uncertainty as it directly affects how you do business. The new solution needs to feel natural and intuitive for users so it doesn’t add a barrier to their day-to-day tasks. On the other hand, if the new solution feels like a completely different platform, it can negatively affect your staff’s workflow and slow down your processes. 

Ultimately, an ISV should give your staff the ability to manage data with more visibility and control in the ERP they work in daily. A simple way to determine whether a solution is right for you is by asking your stakeholders: Will it make your lives easier or harder? 

Your ISV might address the needs of today but should also address the needs of tomorrow. Jason McGee, VP, and IBM Fellow used The Weather Company as an example to describe the importance of responding to an increase in demand. He said: “When extreme weather like a hurricane hits, page views can spike 5x to 150 million views per day, along with 25 billion on-demand forecasts… and 40 billion API requests [to connect the forecast to other app services].” 

As you anticipate growth for your business, find a solution that can support increases in sales volume, so you don’t waste your investment and are forced to move to a new solution. If the answer is not scalable, the loss you could experience is financial and practical since looking to replace it can significantly disrupt the flow of your business. Instead, choose a technology that can adapt to you in times of change and will not leave you stranded. 

It is no surprise that you might face a new situation and need to adapt, whether an increase in customer demand or a change in business requirements. However, not all ISVs have the same capabilities, so you should establish your preferred approach.  

While speed and flexibility are essential in any successful ISV partnership, agile solutions allow you to adapt quickly to changing needs and make new features available to users. Customizing the solution can also help you meet specific business requirements and enable you to perform certain tasks more easily and accurately. There isn’t a single answer to what you should prioritize, but you can try to anticipate your greatest needs when selecting your ISV to make the most out of your partnership.  

Finding a reputable ISV is essential in lowering your investment risk and setting expectations for the type of collaboration you will experience. You can find out what customers say about an ISV through online reviews, ratings, and video testimonials, giving insights into their work and impact on the supply chain. 

In your search, pay particular attention to the following:  

• What do their customers say about them?  
• What have they accomplished?  
• Whom have they worked with before?  
• What have they contributed to your industry?  

Ultimately, your choice should reflect your trust in them to provide you with expert guidance, the ability to solve complex issues, and a great desire to collaborate with other stakeholders.  

The most common pricing models when working with ISVs are: 

• Software as a Service (SaaS): A subscription-based model where you can access the software via the cloud through a license.  
• Perpetual: In this model, customers pay a one-time fee and purchase the software with the option to pay annual maintenance fees.  
• Time and Material: These are additional fees, including consulting hours, training, and any other support you might need from your ISV. 

Most customers prefer the SaaS model since they can use the software for the duration they want, giving them time to test out the technology and see the benefits without paying a lot upfront. As more companies are looking to expand their software ecosystem with new applications, The SaaS pricing model is critical in helping small to midsize companies grow. Over the long term, perpetual pricing could be financially advantageous. 

In a recent McKinsey survey of 1,000 B2B decision makers, lack of speed in interactions with their suppliers emerged as the number-one “pain point,” mentioned twice as often as price. ISVs partnerships can help businesses achieve their goals through excellent support and customer experience. Learn more about the support your ISV partner offers, especially as taking the proper steps in your digital transformation goals can be overwhelming to do on your own.  

For example, find out who in their team will answer your questions, their typical response times described in Service Level Agreements (SLA), and what resources they have online to help you troubleshoot. This step is as crucial as determining the technology you need because your team will want to know what to expect and establish trust with the selected ISV. After all, you are entering a partnership and need to see if they align with your values, communication methods, and overall objectives.