The last three years have influenced many companies to implement new software, in both obvious and unexpected ways. But, how are they finding and evaluating the right software for their small business? To find out, Capterra surveyed 200+ Canadian SMEs on their approach to software buying.
What we will cover
Adopting new technologies has been a core strategy for businesses rising to various challenges over the last few years. Digital solutions have been used to help businesses adapt in the face of the COVID-19 pandemic, global supply chain shortages, and even the national labour shortage, amongst other business disruptions.
Regardless of the difficulties the new year may bring, technology will likely remain a top priority for many businesses. In the latest forecast by Gartner, IT spending is predicted to grow by US$4.6 trillion in 2023. Software solutions in particular are expected to grow by 11.3% from last year.
With software taking a vital role in many companies’ operational arsenals, Capterra surveyed 219 Canadian SMEs with annual revenues less than US$1 billion to learn more about the most common approaches to software buying in 2023. For a full methodology, scroll down to the end of this article.
Common approaches to finding the right software for small businesses
Understanding how companies commonly carry out software-buying processes will likely benefit all enterprises, even those in less technologically inclined industries. Out of the SMEs surveyed in Canada, only 4% currently have no plans to upgrade or modify their software.
To help decision-makers access these insights, let’s take a look at different aspects of how SMEs are finding the right software for their small businesses.
Building software-buying teams
The first step in starting any project is to identify and give responsibility to the most relevant stakeholders. The majority of companies surveyed (48%) built teams of internal IT professionals to handle new software selections and purchases. These teams are formally established and evaluate software on a persistent basis, not a project-by-project one.
Teams of solely internal IT specialists may not be feasible for every SME, as tech workers are in high demand in Canada. Over a quarter of those surveyed (27%) have designated teams of professionals from various departments oversee software evaluation and purchase. These teams could include executives, managers, and employees with a range of skill sets, helping companies create a diverse knowledge-base to identify the best software for their needs.
Planning software-buying projects
To pull off the successful implementation of new software, a detailed project should be outlined before research begins. Defining parameters such as the duration of the project, software specifications, and the overall budget provides a roadmap to finding the right products to fulfill a company’s needs.
The timeline of a software-buying project depends on the feature requirements, budget requirements, and integration capabilities of the new tool. Most survey respondents (45%) said they typically take between three and six months to evaluate, select, and finalize new software purchases. Longer evaluation periods were also observed, proving that software choices are careful and important investments for business.
When it comes to establishing a budget for a software purchase, most businesses surveyed (43%) wait to start or even complete the evaluation of software providers. This may be the best way to create a strategy, as investing in customized software or solutions with complex features could cost more upfront while providing cost-saving, efficiency-increasing benefits over time.
Another third of surveyed SMEs (36%) tended to decide their software-buying budgets before starting product research. 21% also reported being flexible when it came to requirements and only confirmed a budget after software products were selected.
Evaluating software products for your business
There are many ways to carry out product research for software. Buyers can reach out to their friends for opinions, talk to customers, or read a range of internet sources for information. However, it seemed industry experts and professional/trade association websites were deemed amongst the most influential sources for survey respondents.
Which types of content did software buyers consult most when searching for new tools? Customer reviews and ratings were a top answer for 40% of respondents, though these can be accessed in a variety of places on the internet. Search engines, marketplaces, social media sites, forums, and industry-specific review platforms offer different perspectives that software seekers can use.
Many of the other resources that surveyed companies’ consulted are available on vendors’ websites or via contact with the vendor, including:
- Detailed customer implementation stories / case studies (38%)
- Personalized product demonstrations (38%)
- Product documentation / user guides (37%)
- Information about support capabilities (36%)
- Implementation/migration guides (36%)
Important points when starting the search for software
Each organization has distinct reasons to adopt new technology. Some may be seeking improvements to their operations, while others could be addressing business challenges on the horizon, like those uncovered in part one of this two-part survey series. Whatever the motivation, it’s important to take note of the reason behind the change. By recording the cost of the pain point, measuring the success and ROIs of software investments becomes more accurate.
Amongst Canadian SMEs surveyed, a third (35%) chose to implement new software when their needs outgrew their current technology. Businesses also looked for digital tools to make improvements to productivity and to assuage concerns about cybersecurity (both cited by 34%).
What are the most important factors to consider when searching for new software? Unsurprisingly, 36% of respondents cited features and functionality as one of their five most important criteria when searching for new software. However, the security of the product is also a top priority for 35% of respondents. For buyers that want to assess a product’s security before purchasing, resources for cybersecurity certification can be consulted.
Top aspects of a product to be considered also include:
- Ease of use (35%)
- Ability to integrate with other tech (34%)
- Cost (32%)
Review platforms such as software directories provide centralized platforms where software buyers can read feedback on products from fellow users. Using Capterra Canada, for example, viewers can filter software category listings based on features and cost; reviews can be filtered using industry and company size to show the most relevant feedback. Products can also be compared to their alternatives for users who have a shortlist.
Common obstacles to software implementation can also be useful to note. Half of software-seekers surveyed (50%) had concerns about the learning curve or downtime associated with implementing new technologies.To combat this, free trials of the software can be used to understand associated learning needs that come with the product and create a realistic training strategy based on experience. Vendors also commonly offer training materials that vary between generic how-to videos to bespoke team training sessions.
A checklist for planning software-buying projects
By looking at how other SMEs in Canada handle their software-buying missions, project managers can find insights for planning their own product searches. Using the following takeaways, companies can find the confidence to seek out new software solutions:
- When experiencing friction, remember that software can be a solution. Over half of SMEs surveyed (56%) will upgrade their software to gain more functionality, while a further 63% plan to scale up their product licenses to manage more projects.
- Choose a team of internal or external professionals to tackle the software selection process, utilizing employees with the most relevant experience to the project.
- As new solutions are implemented (and existing solutions potentially affected), be sure to communicate changes often throughout the organization.
- Outline a step-by-step plan to organize, budget for, adopt, and maintain a software implementation plan, perhaps using project planning software.
- Research potential solutions using diverse sources and types of information; don’t forget to evaluate products based on the most important criteria for your business.
Capterra conducted the Small Business Buyer Behaviors Surveyonline from August to October 2022, among 258 respondents from Canada. Research was carried out on companies with revenue of less than US$1 billion and between 2 and 999 employees, but for the purposes of this report we have focused only on the responses of 219 decision-makers working at SMEs with between 2 and 249 employees.
Respondents were screened for their involvement in software purchasing decisions and those who were Leader/ Member of group or had significant influence qualified for the study. The survey was developed collaboratively by a team of Gartner analysts and was reviewed, tested and administered by Gartner’s Research Data and Analytics (RDA) team.
Disclaimer: Results of this study do not represent global findings or the market as a whole but reflect the sentiment of the respondents and companies surveyed.