TECH TALK 10: SOFTWARE VENDORS AND
CONSULTANTS
By Bill Allen
This is the 10th article in the Tech Talk
series.
Every January, the International Builders'
Show provides a venue to rollout all that's
new and wonderful in the technology industry.
Many builders I speak with put off their
software purchases until January when they
can see everything and then make a
decision.
Underneath all the hype and glitz there's
another initiative that's nearly as active as
the Show itself. Software vendors and
consultants (I confess I'm one) renew their
relationships in the hallways of the seminar
areas and in vendors' private suites. The
outcome can range from an update on a
vendor's capabilities and limitations to a
contractual commitment to "partner."
Those relationships can affect the way home
builders buy software for their businesses.
For example, after carefully evaluating
what's available in stand-alone products like
prospect management, service order, CAD, and
financial modeling software, most builders
decide what to buy fairly quickly. But trying
to decide whether or not to buy an integrated
system - and then which one to buy - is
another story. After all, an integrated
system affects your entire business and all
operations.
For a builder, the decision-making process
starts with a well-documented set of goals
and requirements for an information system.
So far, so good. As you get further into it,
you realize that most vendors fulfill "all
your needs." The further you go, the more
confusing and murky the information
becomes.
At this point many builders seek the advice
of an "impartial source" to separate the
wheat from the chaff. Enter the information
technology consultant, whose job typically
ranges from recommending technology solutions
to implementing them. "This person will steer
us down the right road, right?" asks the
builder. The answer is, "It depends."
Today's world is threaded with alliances of
one sort or another, and there are plenty in
the homebuilding business. Put plainly, some
consultants out there are really software
salespeople in disguise. They take
commissions and curry favors from the vendors
they've cut deals with. In my opinion, that's
where the line is crossed.
As a prospective software user, it's
important to know where to get straight
answers. Many IT consultants are dedicated
professionals who are very knowledgeable
about the home building industry, its trends,
and what to avoid. In some cases their
software recommendations come from relatively
impartial perspectives. However, it's vital
to ask them what compensation, if any, they
receive from the vendors they recommend.
All consultants, even those that aren't
motivated by money, have biases. And it's
simply impossible to be on top of all the
existing technology options and still be
skillful enough to know how to apply them to
a specific user.
In professional circles, it's not unusual for
a consultant to accept a modest finder's fee
from a vendor for providing a lead on a
prospective user. This saves the vendor time
and money on marketing and selling to the
prospect. However, it isn't ethical when the
"consultant" receives a significant
commission and the customer pays a bloated
price for software of questionable value.
That can happen when both a sales force and
"partners" are involved.
To prevent you from falling into that trap,
here are some tips for evaluating technology
at the International Builders' Show:
Gather ideas and information from all
available resources. Salespeople can give you
as much insight as consultants can, and both
can help you.
It's appropriate and in your best interest to
ask consultants how they are paid and what
compensated alliances they have with which
vendors.
Get a feel for a consultant's scope of work.
In addition to asking about the vendors the
consultant works with, find out which markets
they work in and whether they recommend
technology solutions, help implement them, or
both.
Be a sponge. Ask what else you should be
asking about. Maybe you can't ask 20
questions, but a salesperson or consultant
can raise some you didnt think of.
Concentrate on what the vendors (and their
software) you are investigating have done,
not what they will do.
Find out who currently uses the software.
Builders who use software you are
investigating are your most impartial
sources. They have worked with the software
in their businesses and know its
capabilities.
Decide what software to buy only after you
can visualize how it will work for you and
your employees. This means you will probably
not ink a deal until sometime after
January.
Bill Allen is a longtime contributor to
NAHB's Business Management & Information
Technology Committee and is president of W.A.
Allen Consulting
(http://waallenconsulting.com). The Redmond,
WA, company provides information technology
consulting services and process management
assistance to the home building industry.
Contact Bill at 425-885-4489 or via e-mail at
skagit@foxinternet.net.
For more information about this item, please
contact William Heslop at 800-368-5242 x8472
or via e-mail at wheslop@nahb.com.
