Introduction

Choosing the right software for your company can be bewildering. There are literally thousands of titles to choose from, and programs and their functionality change frequently.

Plus, the software industry grows quickly - so quickly that you probably don't know about all the titles that are available. And with the advent of Internet-based Application Service Providers across most software categories, there can even be a way to use business applications without buying them yourself.

This Buyer's Guide can cut through the confusion by helping you identify the software that fits your needs. We'll also help you compare software packages, looking beyond sticker price to see if their functionality, ease of use, technical fit, available support, and method of access are right for you.

We've sorted the different categories of business software into common groups. Though this is not an all-inclusive list, it should give you a good idea of how the right software can make your company more efficient.

Business/Productivity

Software programs designed for general business tasks encompass a broad range of functions within an office, from operating systems to project management software. They apply to the major functions of any office, and as a result can provide a productivity boost. Specific applications include programs for:

Accounting/Financial Software - Helps you keep your own business accounts, and may include tools for tax preparation, online banking, and emailing invoices.

Business Plan/Legal - Helps create standard business plans and legal forms.

CBT programs - Streamlines employee training efforts by allowing them to train on their own time with the help of CD-ROMs.

Contact Manager/Organizers - Organizes your contacts and schedule.

Database - Aggregates data and helps in contact management.

Marketing - Integrates sales and marketing data to help drive promotional efforts.

Optical Character Recognition Applications - Turns your paper forms into electronic documents.

Office Suite Combines word processing/spreadsheet/presentation/email programs under one umbrella package.

Operating Systems Desktop - The brain of any computer - enables programs to run and work together.

PDA Applications - Help you get more out of your Personal Digital Assistants.

Project Management - Coordinates multiple aspects of a large project from start to finish.

Spreadsheet - Tracks monthly sales, annual budgets, or the weekly football pool.

Voice Recognition - Accepts oral dictation.

Word Processing - Allows you to type up business documents and anything else involving putting words on paper.

Communications and networking

These programs allow computers to share information with each other. Generally easy to use, networking applications boost internal/external communications but usually require a network administrator to set them up. Specific applications include:

Connectivity - Enables your phones, computers and printers to speak to one another.

Email - Helps you keep in touch with business contacts in Internet time.

Fax - Allows you to send faxes from your desktop.

GroupWare - Enables teams at different locations to work together on the same project by sharing documents and information.

Network Utilities - Analyzes various aspects of a network including traffic and line usage.

Operating System Network - Provides security against unauthorized use of a company network.

Remote Access - Allows employees to work on office files from home or on the road.

Video Conferencing - Combines audio and video signals for virtual face-to-face discussions.

Graphics and Design

Most companies use graphics and design software, whether for occasional newsletters, business presentations or for every day work. Graphic and design applications include:

CAD/CAM - Allows computer-aided drawing for complex modeling and design needs.

Clip Arts/Fonts - Spices up presentations, brochures, or other company documents with computer graphics, stock art and lettering.

Design and Illustration - Helps graphic artists create illustrations, designs and patterns.

Desktop Publishing - Creates the company newsletter or a sales brochure.

Multimedia - Combines text with audio and video for an interactive experience.

Presentations - Creates an effect equivalent to a slide show.

Development and programming

Development and programming applications require specific, extensive programming skills to take full advantage of their capabilities.

Database - Aggregates data and helps manage information.

Programming Languages - Allows developers to program in various languages.

Programming Suites - Bundles applications for programmers.

Internet/Intranet

A new set of Web-based programs have crept into the software foray with the promise of e-profits. With the exception of Web browsers, most of these applications are geared towards technophiles. Specific applications include programs for:

HTML Authoring - Helps you create Web sites without writing code from scratch.

Web Browser - Helps you navigate through the Internet and read Web sites.

Web Graphics and Animation - Provides illustration and design tools for the online artist.

Web Server and Firewall - Enables Web administration and security.

Utilities

If you've got data worth protecting, you need adequate utility software to ensure a trouble-free network and guard against viruses and computer crashes. Specific applications include:

Anti-Virus - Detects and eliminates viruses.

Backup - Helps you keep more than one record of your data.

Conversion - Enables different systems to exchange information.

Drive - Helps hardware such as printers or monitors function properly.

Enhancement Utilities - Although small, makes an operating system or larger program more efficient.

Security - Guards your business's network.

Utility Suites - Works in conjunction with various utilities to help administer computer functions.

Evaluation and selection

How can you evaluate which software is best?

Assess your needs. Whether it's for a single department or the entire company, the software your business buys will certainly affect more than the person who decides what to buy.

To cover everyone's needs, it's important to solicit input on what the software should do - and should not do - from the people who will be using it.

If you're interested in a contact management application for your sales department, for example, understanding how your sales team maintains its professional relationships with vendors and clients will help you identify what to look for in the software.

Go for the multi-taskers. An important criterion is multi-functionality. An email program that has calendar and address book features will solve more than one problem for your office.

Don't overshoot. At the same time, don't let product marketing lead you to believe more is better. Fantastic (and expensive) bells and whistles may seem less fantastic when you discover your staff has no use for them.

Make sure it's easy to use. A highly equipped program may not boost productivity by much if employees find it difficult to use or require extensive training.

See how well the software fits the needs you've identified. Be sure to pay attention to the specifications provided by the publisher. Some publishers also offer free trials of certain titles, which allow you to actually test out the software before you buy.

Making the selection

Knowing your needs helps you identify the features that might set one program apart from another.

For example, some programs are geared towards large companies, while others are designed with a limited number of users in mind. Do you expect your company to grow rapidly over the next few years? Compare programs based on their ability to adapt to a growing company.

Some mail server programs, for example, can handle one office location or multiple remote sites across the country, all from the same set of software.

Another crucial factor when choosing between two similar programs is the service and maintenance that you can expect to receive from the vendor/publisher/manufacturer for the life of the product. Investigate which program gives you the best insurance policy should something go wrong.

Inquire about technical support, whether online or over the phone, service calls, and how future upgrades will affect the application.

Develop relationships

If you realize that your company will need different types of software at different stages of growth, it's important to maintain relationships with those companies that will help you make software purchasing decisions.

Consultants, third-party vendors, and software companies are all eager for repeat business, and often can offer better prices or make referrals in an effort to keep your company as a client.

How to buy

Software is available in a variety of forms - it can be purchased out of the box off a shelf at an office superstore, downloaded from a vendor Web site, or even accessed on a rental basis over the Internet from an Application Service Provider.

You can buy it as a single-user application, or with multiple user licenses that eliminate the need for several boxes of the same program.

For the most part, choosing the right outlet and licensing structure for your purchase depends upon the type of software you're interested in.

Boxed. Local retail outlets usually carry a broad range of off-the-shelf, boxed business programs. In this Internet-heavy world, buying retail has become a less attractive way to pick up the latest software titles.

That's because most stores' software inventory can't match what's available on the Web, and prices are much more competitive online than in a traditional over-the-counter setting. Internet vendors often offer titles below list price to beat prices on other sites.

However, going to retail outlets and third-party vendors for off-the-shelf programs may still be the right choice for some businesses. Establishments like this stake their business on a working knowledge of programs and their scalability. Your local computer shop may charge a higher price for a financial management program, but it may also be able to advise you on which program best matches your operating system.

You may also be better off having a few resellers quote you prices rather than ordering 20 copies online if you're interested in buying a program for multiple employees. (Of course, an even better option is to get multiple licenses for that program. (See our pricing section for more.)

But the future of software purchasing is tied to the Internet, and companies are creating new ways to sell and distribute applications.

ESD. Some boxed software is also available through Electronic Software Distribution (ESD), a process by which you download the program directly from the vendor's Web site. You can save about 10% off the software price (and that doesn't include shipping savings) if you choose to download the program rather than buy it in a box.

Currently most sites offer multiple timesaving downloads, but major titles such as Microsoft Office are still only available by delivery. However, the expectation is that eventually all software will be downloadable.

While this will significantly reduce the amount of time you have to wait to install a program, be aware that most IT folks prefer to have a hard copy around in case of problems.

ASPs. And of course, then there's the option to rent software rather than buying it yourself. The rise in popularity of Application Service Providers (ASPs) means that you can access all kinds of software, from human resources management to email, over the Internet for a monthly per-user fee.

You can save up to 50 percent by renting an application rather than buying it, and you can usually start working with the software much sooner than if you had to install it on your network or individual PCs.

What's the biggest advantage of using ASPs? The time you save by not having to install software on your own computer, deal with bugs, troubleshoot or manage upgrades.

Keep in mind, however, that renting software from an ASP works best for businesses that require little or no customization. (Read our ASP Buyer's Guide for more of the scoop on ASPs.)

Custom-designed applications. Need some customized software? Applications tailored to a specific industry, or business, are best purchased through a software company. For example, if you are on the lookout for marketing software, you'll have a few marketing-only software companies from which to choose. And because of their specialization, they can sometimes customize a product to your parameters.

Calling in consultants makes sense if you need software designed specifically for your business situation. For example, if your company would benefit from an Intranet (internal-only online presence) but you don't have the internal resources for it, consultants could set it up for you.

Consultants are also often involved on the installation side of things; they can typically offer a competitive price on ensuring administration of a new software product is hassle-free.

Pricing

Pricing for software depends on the kind of program you are purchasing, how many licenses you need to buy, and who you're buying the software from.

If you are planning on buying more than one copy of a program - Microsoft Office for the entire office, for example - you should look into open license programs. Most major software publishers have license programs where multiple licenses can be purchased at a significant discount from buying more than one copy through an online retailer.

An added benefit of open license programs is you do not need to deal with the hassle of multiple sets of software boxes, documentation, and license information. A master set of disks and information is sent to your company and the same hardware can be used to load the application onto the number of computers covered by the license agreement.

Support and upgrades

For a small business, the greatest cost of computer software lies not in the initial price of software but in installation, training, maintenance, upgrades, troubleshooting and lost time due to system failures and lack of user training. A good support and upgrade strategy will help minimize these costs.

Whenever possible, give your workers formal training for the software you've purchased so they can start being productive immediately. Online tutorials, self-paced manuals and training videos may provide alternatives to formal training.

A standard software license may come with 90 days of "free" support, but that period mainly covers short-term installation problems, not the long-term technical support you're bound to need.

Vendor technical support can get expensive for a small business, running as much as $200 a year per user. Encourage users to try free sources of support like Web sites and newsgroups.

Also keep in touch with software upgrades. These include version upgrades and bug fixes. Bug fixes, also known as patches, frequently correct security problems or major software performance, and should be downloaded as soon as they become available on vendor Web sites.

Version upgrades occur less frequently than bug fixes and include major changes to the software. They should be adopted with care as they may disrupt company performance and compatibility with client software.

Copyright Issues

Because software is so easily loaded on to more than one computer, copyright infringement runs rampant. According to the Business Software Alliance, infringement costs the software industry more than $12 billion in lost revenues annually.

How do businesses try to beat the system? The two most common ploys are purchasing pirated software or simply installing a program with one seat license onto more than one computer.

In software buying, the license is essentially what you purchase, not the discs. And if you're copying the program onto more computers than you've agreed to, you're breaking the law.

To stay legal, ensure that the number of licenses you're purchasing matches the number of computers that will run the software.

Pirated software is also sold to businesses through retail channels - often unknowingly. There is no simple way to pick out a pirated copy from a legal application, but certain signals may tip you off to the fact that the software was not acquired legally: exceptionally low prices, for example, or too many programs offered on one disk, could be red flags.