Computer software for business

Businesses change over time and so do their software needs. If your current software is out-of-date or holding your business back, upgrading can help you gain productivity and drive value from your initial investment.

Advantages of new software for business

Choosing the right business software can help you:

• cut costs by automating routine tasks
• improve the efficiency of staff
• increase or measure office productivity
• streamline business operations and accounts
• replace paper processes
• communicate more effectively with customers, suppliers or partners

Signs that your business may need new software

It's not always easy to determine if your current business software needs replacing. You may benefit from a change if, for example, your existing software:

• is frequently running slow
• is prone to bugs
• fails often
• is unable to cope with the number of users
• struggles with the volume of transactions
• isn't integrated with other systems you are using
• can't provide the level of reporting you need
• doesn't meet the latest regulatory requirements
• doesn't meet your changing business needs

Upgrading or switching to new software can be a big step for many businesses. Before committing to a change, make sure that you have a clear business case for it and that the benefits will outweigh the risks.

Write down the objectives and potential benefits of the new software. This will enable you to prioritise the list to work out the best returns on investment. It may help to talk to your employees, suppliers and customers to gather ideas for improving your business processes using IT.

Choose software that will run on your current hardware, as long as this doesn't reduce potential benefits. You should include any hardware upgrade costs in your budgets - see computer hardware for business.

Alternatively, look at outsourcing your software requirements - eg through cloud computing - which could help reduce both your software and hardware costs.

Importance of business software for growth

Ideally, you should develop a long-term strategy, covering your future IT needs. This should take into account potential changes in customers, staffing levels and/or your products and services. See how to carry out a technology needs assessment.

You should also consider if some of the emerging technologies, such as artificial intelligence or Industry 4.0 technologies, could help or improve your business.

There are many different types of business software. Deciding which one is best for your business is not always easy and will often depend on:

• the size of your business
• the particular needs of your business
• the tasks that need to be automated

Common types of business software

Common types of software used in business are:

• word processing programs
• accounts software
• billing software
• payroll software
• database software
• asset management software
• desktop publishing programs

These usually come as bespoke products or off-the-shelf software.

Pros and cons of bespoke software

It is possible to build bespoke software specifically for your business. You can either:

• Write the software yourself. If you run a small business, writing the software yourself is unlikely to be cost-effective as you need to have significant expertise and lots of time.
• Have the software written by an external supplier. With specialist help, you should get the exact functionality you need. However, the price is likely to be high, and you will be tied to that supplier for future support.

Producing any bespoke software can take a long time and your staff should be able to input in the development process. For most small businesses, bespoke software may not be the best choice.

Pros and cons of packaged, off-the-shelf software

Packaged software is standardised and generally low priced in comparison to bespoke software. The functionality may not be exactly what you need, but it could make sense to change your business practices to suit the software rather than having software specially written.

The high volume of sales of such software usually means that you will be able to get support and training from a number of different sources.

Standard software packages are usually the best choice for small businesses. In some cases, you can modify the software to meet your requirements if it doesn't include all the functions you need.

Find more tips to help you choose software for your business.

Keep in mind that you will typically need a licence to use commercial software. Read about the different types of software licences for business.

All software applications need a software licence in order to run. A licence describes terms and conditions under which you can use and distribute software.

Common types of software licences

Proprietary software is software developed by a supplier and made available for use under an end-user licence agreement, which you effectively accept when you install the software.

There are three different types of proprietary software licenses:

1. Per device licences are usually for one installation of the software on a server, computer, phone or other device. This is the most common type of licence for software. Some versions of this type of licence may require you to activate the software. This allows the supplier to check that the software is installed on just one PC.

2. Per user licences are common where more than one person can use the software simultaneously. The licence is usually for a specified maximum number of users.

3. Site licences are much less restrictive. They typically allow as many users as you wish at one location.

Licensing also applies to open source software, but terms and conditions of use are generally more lenient - see more on open source licensing and legal issues.

Software licensing and the law

The licence sets out how you can use the software. It usually prohibits you from doing certain things, like:

• making copies and passing them on
• selling your licence to someone else

Most proprietary software is copyrighted and comes without the source code, ie the code originally written by the programmer. Without this code, neither you nor any other software supplier can make changes to the software package.

When you buy proprietary software, you buy the right to use it in a specific way. The software company retains ownership of the software.

Software piracy

Software licences are often expensive. It may be tempting to buy just one licence for a product and copy it for several users. However, you and your business could face prosecution if you are discovered doing this.

Be wary of buying very cheap software or operating systems as they may well have been pirated by criminals. Consider investing in software that monitors applications running on your system and builds up an inventory for you. This is a good investment, partly for your own resource management and partly because it helps you counter allegations of running unlicensed software.

Open source software is made available under a licence that allows you to modify, make copies and pass the source code on to anyone. The software comes with its source code released - which you can change to meet your needs.

Pros and cons of open source software

The advantages of open source software include:

• lower software licensing costs
• no supplier lock-in
• freedom to do what you want with the software
• open standards that support collaborative development
• freedom to upgrade software as it suits your business

The main disadvantages of open source software are:

• It may be difficult to get commercial-grade support with agreed response timescales.
• Some proprietary formats, such as Microsoft Word's '.doc' format, are so widely used that other formats may be less acceptable for business.
• If the open source software is compatible with a particular proprietary format, they may be limited to core features and not fully 100 per cent compatible. In many cases, this may still be sufficient.

Open source licenses

Licences for open source software vary. Some require you to make any changes made to the source code publicly available, while others will allow you to keep those changes private.

You should read the terms of the licence carefully before using or changing the software. Find out more about open source licensing and legal issues.

Open source software is usually available for free download or off-the-shelf at a low cost. See more on open source business software.

Software as a Service, also known as SaaS or on-demand software, is a way of delivering software applications to the end-user over the internet. SaaS can provide great advantages for most businesses, primarily in costs and flexibility. However, disadvantages of SaaS (such as lack of control) are considerable and should not be ignored.

What is Software as a Service (SaaS)?

SaaS is a software licensing and delivery model in which software is:

• licensed on a subscription basis - usually monthly or annually
• centrally hosted in the cloud - find out more about cloud computing
• accessed via a browser over an internet connection

SaaS is an alternative to the traditional on-premise software installations. It has become a common method of delivering many business applications, including:

• office and communication software
• payroll and accounting programs
• customer relationship management software
• HR management software
• enterprise resource planning programs
• corporate performance management suites
• mobile applications

SaaS advantages

SaaS offers many potential advantages over the traditional models of business software installation, including:

• Lower up-front cost - SaaS is generally subscription-based and has no up-front licence fees resulting in lower initial costs. The SaaS provider manages the IT infrastructure that is running the software, which brings down fees for hardware and software maintenance.
• Quick set up and deployment - SaaS application is already installed and configured in the cloud. This minimises common delays resulting from often lengthy traditional software deployment.
• Easy upgrades - The SaaS providers deal with hardware and software updates, deploying upgrades centrally to the hosted applications and removing this workload and responsibility from you.
• Accessibility - All you need to access a SaaS application is a browser and an internet connection. This is generally available on a wide range of devices and from anywhere in the world, making SaaS more accessible than the traditional business software installation.
• Scalability - SaaS providers generally offer many subscription options and flexibility to change subscriptions as and when needed, eg when your business grows, or more users need to access the service.

SaaS, and more widely cloud computing, can help you make the most of a limited IT budget while giving you access to the latest technology and professional support. However, you should consider some potential disadvantages before making a final decision.

Disadvantages of SaaS

SaaS model sometimes has certain shortcomings, including:

• Lack of control - in-house software application gives businesses a higher degree of control than hosted solutions where control resides with a third party. Typically everyone has to use the latest version of the software application and cannot defer upgrades or changes in the features.
• Security and data concerns - access management and the privacy of sensitive information is a major consideration around cloud and hosted services.
• Limited range of applications - while SaaS is becoming more popular, there are still many applications that don't offer a hosted platform.
• Connectivity requirement - since the SaaS model is based on web delivery, if your internet service fails, you will lose access to your software or data
• Performance - SaaS may run at somewhat slower speeds than on-premise client or server applications, so it's worth keeping performance in mind your software isn't hosted on a local machine.

For more information, see Software as a Service.

If you are thinking about investing in software, it's important to consider a few key points that can help you choose the right solution for your business.

You should not only review your current business requirements, but also keep in mind what your business will need in the future. Consider how software can help your business to adapt to the changes and grow.

Before making any purchases, it is generally a good idea to carry out a technology needs assessment. If you haven't already, you may also want to develop an IT strategy. Both the strategy and the needs assessment will help inform your choices when it comes to new business software.

Document your business processes

Diagrams can make documenting your business processes easier - for example, using boxes for processes and arrows to show documents, invoices etc move between them.

Documenting your business in this way will help you:

• identify areas where new software could improve your business processes
• explain your business and its requirements to potential suppliers when buying software

Shortlist software solutions

Compare your list of requirements with the information that you have about each package. Reject all packages that cannot meet your 'must have' requirements. From the rest, select the one that delivers the greatest number of your advantageous and 'nice to have' features at a price your business can afford.

Additional costs

As well as the price of software, you should also consider support costs, future upgrade costs and the need for hardware upgrades to use your software to full effect.

Future suitability

You should also try to determine if this software would still be suitable as your business evolves. For example, the system should be able to handle an increased workload should your customer base grow.

Licensing

Make sure you buy licensed software and keep safe your proof of ownership, such as the original distribution CDs or hologrammed certificate of authenticity. See more on different types of software licences for business.

Get help with assessing your software requirements

There are many ways to get advice and support when choosing software, including:

• professional and trade associations
• software or business consultants
• software vendors - but keep in mind these might not give unbiased advice
• the computer press - magazines like Computer Weekly and Computing can be a good way to get information on the basic issues, so you know the right questions to ask

For professional ICT advice, you can also contact Invest Northern Ireland's ICT advisers on Tel 0800 181 4422. You can also read about Invest NI's ICT support for businesses.

Once you choose the right software solution, you will have to integrate it into your business. This includes installing the software into your existing systems, carrying out regular maintenance and finding support for your software when you need it.

Types of software installation

In the past, most off-the-shelf software came on CDs or DVDs. Many types of software are now available to buy and download online, and are simple to install.

You can install software on individual machines or on network servers - this is common in situations where several employees and applications share the software.

For businesses with more than ten desktop PCs, it is often better to set them up with a common set of software. This makes it easier to update and check that software is properly licensed.

You may need to activate certain types of software after installation, often online or by phone. If you change the hardware details of the PC, you may need to re-activate the software.

If you don't want to install software on your PCs or servers, you can opt for software as a service solutions and gain access to software applications entirely over the internet.

Software upgrades

Software upgrades are generally needed to ensure that your software continues to perform properly and security. Software upgrades may become available because:

• new or improved functionality is added to the software
• current software has become incompatible with other, newer programs
• security 'fixes' or 'patches' are needed to address 'bugs' discovered in the software

You can usually access upgrades online. It is important to install them and keep systems software fully up to date. Otherwise, your systems may be vulnerable to newly discovered security flaws.

If you're using software stored in the cloud, your service provider will manage your upgrades. See advantages of cloud computing.

Software support

An important factor in choosing software is the availability of technical support. When assessing support, you should consider:

• Location - Time difference can affect availability during particular times. Some providers may offer online or email support, or real-time messaging.
• Price - You may get a period of free technical support when you install your software. However, software support is usually charged for after a certain period of time or after a certain number of queries. Check the cost carefully, especially if the support is on a long distance or premium-rate phone line.
• Response times - If your business depends on your software, fixing problems quickly may be vital. Always read the small print of your maintenance contract.

Some suppliers may stop offering support for older versions of software which can make it difficult to keep software secure.

Look around for the best deal, but make sure that the supplier you choose can deliver on its promises. Find out how to choose and manage your IT supplier.