A recent post over on the HBR blogs documented Cue Ball‘s three minute rule that they encourage their portfolio companies to adopt. According to Cue Ball, the best way to not only develop a customer-driven approach, but to truly develop customer understanding, is to use the three-minute rule where you ask your customers what they are doing three minutes before they use their tool and three minutes after.

The example they give is that, at Thomson, one of the products provides investment analysis of financial earnings data. What Thomson hadn’t fully appreciated — until they applied the three minute rule — was that immediately after accessing the data, a large number of analysts were painstakingly importing it into Excel and reformatting it. This led Thomson to prioritize developing a more seamless Excel plug-in with enhanced formatting capability. The result, an almost immediate and very significant uplift in sales.

If your software vendor uses the three minute rule, then they understand how you use each of their various modules and the integration will allow you to flow from one to the other without having to manually cut and paste data, wait thirty to ninety seconds for new modules to load, or load up Microsoft Office to complete a basic task. Furthermore, they’ll understand what applications you’re using before and what applications you’ll be using after and include easy import and export features that make importing data from the predecessor application a single click and make exporting data to the next application a single click. If switching modules is a pain, or importing and exporting is a nightmare, your vendor does not follow the three minute rule and it might be time to reevaluate your platform choices.

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Industry Week recently published 10 Best Practices for Software Selection from Software Advice that were pretty good. In brief, they were:

• Take Ownership of Selection Process

  Don’t delegate to a subordinate or IT. It’s your process that you’re trying to automate and improve, so make sure you get the software that you need.

• Determine Your Needs

  Know exactly what you need before you even issue the RFP. As I previously wrote, you don’t want to fall for a fliggle-flaggle-floogle sales pitch.

• Get the Right Software for Your Industry

  While there are many products out there, some will be tailored to specific verticals. If it’s tailored to yours, it could be a good thing. But if you’re an automotive component manufacturer and it’s tailored for a bottler, it might not be the right software for you.

• Integrate the Enterprise over Time

  Buying a suite that integrates the majority of your back office functions under one umbrella might be the right decision, but the last thing you should do is a big bang implementation — unless, of course you want your operation to go out with a big bang. Remember Foxmeyer? They were a 5 Billion Dollar company until they tried to do a big bang update of all their hardware and software systems, which went up in a bang that resulted in Chapter 11 and a fire-sale to their arch rival for a mere 80 Million.

• Assess Ease-of-use Carefully

  Even if the system does everything you ever wished for, it’s not a good investment if it’s hard to use, because it will just end up being bypassed. It’s much better to have an 80% solution that’s easy and pleasant to use than a 100% solution that requires a team of PhDs and magicians.

• Ensure Strong Support and Maintenance

  There’s no such thing as bug free software. Don’t let anyone tell you otherwise. Some software will be more bug-free than others, but all systems go down eventually. Make sure the vendor offers great support, because you will need it.

• Pay Close Attention to Vendor Viability

  This doesn’t mean that you should buy from the biggest, because even the mighty can fail. It just means the company should be stable with a sizeable customer base that can support it for years to come.

• Be Realistic About Your Budget

  If you only have 200K, don’t look at software in the 1M range. Don’t even look at software in the 500K range. Focus on finding a solution you can afford, even if it’s not perfect. If you can find a point solution for 100K that has a 5X ROI, then you’ll have a 500K budget next year to fill in the gaps.

• Understand your Deployment Options

  If you don’t have a solid IT department, or they’re overworked, you probably should not be looking at on-premise. Similarly, if corporate policies prohibit certain data from leaving your four walls, you might be forced into an on-premise solution.

• Plan your platform technology needs

  Understand your current platform and the options you are able to support. If you’re a Microsoft Shop, you should probably be looking at .Net solutions. Similarly, If you’re a Linux or Unix shop, a .Net solution should be immediately crossed off the list.

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