Buying Software is like Buying a House

Well, let me qualify that. Buying a data management system is like buying a house. And it isnt, really, but there are some important parallels that highlight the things that go into a proper needs assessment. A data management system is any application that stores business information, usually in a database format. Common examples of data management systems include HRIS Systems, Accounting packages, Donor databases, etc. While Office applications like Word and Excel can be thought of in this manner, they’re actually tools that work with data and don’t really manage it at all – they leave that to you.

In the early 21st century, effectively managing your business, non-profit or otherwise, depends on your ability to manage and make use of your business information. Quantifying results, understanding outcomes, maximizing people and systems and streamlining processes are the essential strategies. Wal-Mart makes the billions because they know that people stock up on Pop-tarts before a hurricane hits, and they know that because they can analyze their data. EBay, Amazon, and, of course, Google are all highly profitable data warehouses. Non-profits and social service organizations are no different. Grant funding depends more and more on quantifiable outcome reporting. Maximizing donors is about understanding who our donors are and maximizing those relationships. A data strategy is an essential business tool.

When you buy a house, you are moving into a neighborhood. And when you deploy a data management system, you are setting it up in a neighborhood where, most likely, others reside. So you want to know something about those other systems before you put down the money, and make sure that you’re setting up a harmonious arrangement. Subscribe to standards (SQL, XML); evaluate the user interface; verify that they offer webinars and ongoing training at a price that you can afford. You want to buy a nice house, not a fixer-upper.

A House is an investment. While you can often start using it immediately, you’re setting up something that will grow in value. Spec out a system that will mange your business in two years or six, not just the data that you have today. Anticipate growth, both in the size of your business and the amount of strategic information that you will be gathering.

You need big enough rooms with ample doors and windows. Because you’ll be going in and out of this house, and others will be coming in. Consider data integration needs before assessing systems and ask the vendors how that integration will be done. If their license states that your warranty is void if you have a need to manipulate that data in any way – such as mass-updating records, or automating integration from other systems, run, don’t walk, to another vendor. They have no business restricting the things that you can do with your information.

Information, like people, is a living thing in your organization. You don’t want to lock it in a box and throw it in the basement. And you do want to buy the house – storing your data in Excel shacks and Access lean-to’s is not a sustainable approach. You want to nurture your information in a healthy environment with parks and schools and shopping malls, where it can interact with it’s neighbors. When you buy a house, you have standards – for the structure, for the community, for the environment. You should have similar standards for your data management systems.

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