I was recently supporting a client who wanted to procure Cognite Data Fusion® as they were looking to become data-driven at scale. They were ready to move forward, and so the conversation inevitably turned to cost. The client, treating it like any other industrial procurement process, requested the price per hour for our software developers’ time. And that’s when it hit me. They’re simply not asking the right questions.
Most industrial players today are used to procuring things like heavy equipment and its maintenance hours, and typically, enterprise software is thrown in as just another item on the shopping list. But the union of industry and subscription software is a new one, and as with any budding relationship, it requires some adaptation. While digitalization is the promised game-changer, sparking greater competitiveness and sustainability among industrial players, not all processes and procedures can be copied and pasted from industry to technology.
I urge industrial procurement experts to start asking new questions during their purchasing processes, questions that will reveal the actual value of the software once it’s integrated in their business. So, when that client I referred to earlier asked me about the price, my first response was, “Software isn’t billed according to head count,” followed by, “Let’s start by reflecting on some questions you should be asking yourself before you invest.'
.jpg)
1. Have you aligned the internal needs of both your IT and operations organizations?
Industrial software finds its home at the crossroads of the IT and operations worlds. Any software purchase affects both. This means that it’s essential to uncover the needs and requirements from both parties, keeping them informed, involved, and aligned throughout the software procurement process.
.jpg)
2. Will it scale and stay futureproof?
You may be making a software purchase to solve a specific problem you have now, but it’s important to think bigger. Software that solves a single use case, be it predictive analytics for gas turbines or production optimization for certain wells in a field, is an easy fix. But software that scales to include more turbines or even hundreds of wells across multiple fields is another thing entirely. During your purchasing process, it’s important to look ahead to arising needs, even a year or two down the road, and ask yourself: Can this software solve it
3. Can I see a demo?
When it comes to software, seeing really is believing. PowerPoint slides and talented salespeople can only tell you so much. A demo will show you. It’s within your rights to request this kind of real-life proof, to get a taste of what that technology can do for you.
4. Is it fit for purpose?
The harsh reality is that no software available today will be able to fit your needs perfectly. In my experience, out-of-the-box software products will, on average, meet about 80 percent of your needs. And while this 80 percent doesn’t cover all your requirements, it’s important to remember that, with the right software partner, it does mean that 4/5 of your requirements will be met within six months. This is a far better option than holding out and waiting for the perfect solution (that may never come), or building something completely bespoke in-house that you need to maintain indefinitely. This requires smart adaptability and a willingness to go for ‘good enough’ when it comes to software. Over time, and most likely faster than you think, you can go from ‘good enough’ to ‘game changing’.
5. How do you price it?
I’ll say it again, pricing software is not copy and paste from the pricing of a pump. It’s an entirely different breed which requires a new approach. Software is a product, and we price it as such, rather than charging by man hours based on level of experience. Once you know the product price, ask about scalability, as future needs are bound to arise. Discuss with your vendor a pricing model that removes friction at later stages, for the time when you are ready to scale solutions across the rest of the organization.
Bring these questions to all corners of your operation
Industrial companies are increasingly turning to software to solve some of their biggest challenges, particularly when it comes to operational efficiency, safety of employees, and sustainability. In my experience, solving these challenges requires alignment across the organization, to truly make it effective. It’s important to raise these five questions with key parties across the business, instigating an open discussion about the needs and the role of the software in the relevant corners of the company. It may well upend your procurement process as you know it, but my money’s on you getting greater value for your software investment.