For the past several years, I've seen countless small businesses waste enormous sums of money trying to find the perfect vertical software application for their particular industry.

Let's look at some evaluation criteria for a new industry-specific software application your firm is considering purchasing.

Consider how the proposed software program fits in with your investments in Microsoft Office and Microsoft Windows.

In addition, find out how the software compares to what you've come to expect as standard amenities from software programs -- such as importing, exporting, context-sensitive help, pull-down menus and toolbars.

Have your internal guru or computer consultant perform a technical evaluation of the proposed software.

So, before you get all excited about some slick marketing presentation you saw at a trade show, a glossy direct-mail piece that landed on your desk, or a persuasive trade magazine ad that caught your eye, be sure to perform some due diligence on the software vendor and its product.

Assign a representative user or set of users to evaluate the proposed software purchase for business value.

Once you're satisfied that the proposed industry-specific software program is technically sound, consider the program's business value. Turn the program over to a few representative users in your company. Ask them to evaluate it from the standpoint of solving specific business problems.

In managing these pilot tests for small businesses, I've seen abysmal results when doing technical evaluations of proposed purchases of industry-specific software. So, rarely does software even get to the stage of end user business value testing. However, it's much better to find out if the program is a dog with fleas before you've written the nonrefundable check to the software vendor.

A few other words of caution to consider:

  • Avoid nontechnical salespeople -- For many years, I've seen dozens of industry-specific products verbally misrepresented by borderline computer-literate sales staff. If you have any doubts about the product's technical capabilities, insist on speaking to someone at the vendor who is technical.
  • Be watchful for obsolete technology -- If you're used to purchasing software from major software vendors, such as Adobe, Symantec and Microsoft, you may be shocked to find that small, industry-specific software vendors are years behind the curve.
  • Don't settle for a demo -- You need to kick the tires - ask for the real program.
  • Find out whether the software vendor is committed to enhancements and upgrades -- The program may be great today but seem really passé years later if no upgraded version becomes available.
  • Watch out for 32-bit Window-dressing covering up a 16-bit program -- Many times you'll find that a small industry-specific software vendor has tried to update an aging 16-bit software program by upgrading select parts of it to 32-bit code.

Tip:Need help sniffing out the stench of a 16-bit impostor? In many versions of Microsoft Windows, the Processes tab of the Windows Task Manager yields big clues. To reach the Windows Task Manager, press Ctrl + Alt + Del and select Task Manager. On the Processes tab, red flag any occurrences of WOWEXEC or NTVDM. Also be wary if the Setup program won't install to a folder with a long file name, greater than eight characters - another telltale sign of 16-bit relics.

The Bottom Line

There are many niche software applications on the market that can produce excellent return on investment (ROI). However, don't write that big non-refundable check for a new software application until you've done some serious tire kicking. Use the tips in this article as your software purchase due diligence checklist.