## Introduction

Selecting the right software for your business is a critical decision that can significantly impact your operations and long-term success. In this article, we will explore the second stage of the software selection process: detailed selection. We will use an example to illustrate how to effectively define selection criteria, assign weights to them, estimate how well each option fulfills these criteria, and calculate overall scores. Our (simplified) example involves a company looking to introduce new software to track prospects and sales along the sales funnel.

This article describes stage 2 of the software selection process: The Detailed Selection

Table of Contents

- 1 Introduction
- 2 Define Selection Criteria
- 3 Assign Weights to Each Criterion
- 4 Understanding the Need for Weights
- 5 The Pairwise Comparison Method
- 6 Applying the Method: An Example
- 7 Calculating the Weights
- 8 Estimate How Well Each Option Fulfills the Criteria
- 9 Calculation of Overall Scores
- 10 Consider the cost
- 11 Calculate the Value Score
- 12 Conclusion

## Define Selection Criteria

To make an informed decision, the first step is to define the selection criteria. In our example, the company needs to consider several criteria:

a. **Integration with Existing Webshop Platform:** This criterion is a must-have for the company since their webshop is a crucial part of their business.

b. **Ease of Use:** Ensuring that the software is user-friendly is essential to boost adoption and reduce the learning curve.

c. **Custom Dashboards and Reports:** The ability to create customized dashboards and reports will help the company gain insights tailored to their specific needs.

d. **Multi-Channel Sales Tracking:** The software should allow the tracking of sales via different channels, including phone and email, in the same system.

e. **Vendor’s Support and Updates:** The vendor must commit to at least 5 years of software updates and service to ensure the longevity of the solution.

## Assign Weights to Each Criterion

Assigning weights to the criteria allows you to prioritize them according to their importance. In our example, let’s assign weights based on the company’s preferences and business needs:

**Understanding the Need for Weights**

When evaluating software options, it’s common to have multiple criteria to consider, such as features, usability, integration, and vendor support. However, not all criteria hold the same level of importance. Assigning weights helps prioritize these criteria, ensuring that the selection process aligns with the organization’s goals and requirements.

**The Pairwise Comparison Method**

The pairwise comparison method is a structured approach to determine the relative importance of each criterion in relation to others. It involves systematically comparing each criterion to every other criterion, considering whether one is more important, equally important, or less important than the other. This process is often represented in a matrix, where “1” signifies that the criterion on the left is more important than the one on the top, and “0” or an empty cell indicates the opposite.

**Applying the Method: An Example**

In this example, we have five criteria, each of which is numbered C1 through C5

Criteria shortname | Criteria description |

K1 | Webshop Integration |

K2 | Ease-Of-Use |

K3 | Custom Dashboards |

K4 | Multi-Channel |

K5 | Long-Term-Support |

Now, we compare each criterion with all other criteria in a pair-wise manner like this:

- K1 (Webshop Integration) vs. K2 (Ease-Of-Use): “Webshop Integration” is more important (1)
- K1 (Webshop Integration) vs. K3 (Custom Dashboards): “Webshop Integration” is more important (1)
- K1 (Webshop Integration) vs. K4 (Multi-Channel): “Webshop Integration” is more important (1)
- K1 (Webshop Integration) vs. K5 (Long-Term Support): “Webshop Integration” is more important (1)
- K2 (Ease-Of-Use) vs. K3 (Custom Dashboards): “Ease-Of-Use” is less important (0)
**Note:**Since K2 vs. K3 is 0 (K2 is less important than K3), K3 vs. K2 must be 1 (K3 is more important than K2)

- K2 (Ease-Of-Use) vs. K4 (Multi-Channel): “Ease-Of-Use” is more important (1)
- K2 (Ease-Of-Use) vs. K5 (Long-Term Support): “Ease-Of-Use” is more important (1)
- K3 (Custom Dashboards) vs. K4 (Multi-Channel): “Custom Dashboards” is less important (0)
- K3 (Custom Dashboards) vs. K5 (Long-Term Support): “Custom Dashboards” is less important (0)
- K4 (Multi-Channel) vs. K5 (Long-Term Support): “Multi-Channel” is less important (0)

By following this process for all possible pairwise comparisons, we create a matrix of values representing the relative importance of each criterion in relation to the others.

v more important than > | K1 | K2 | K3 | K4 | K5 | Criteria_SUM | Weight |

K1 | X | 1 | 1 | 1 | 1 | 4 | 40.00% |

K2 | X | 1 | 1 | 2 | 20.00% | ||

K3 | 1 | X | 1 | 10.00% | |||

K4 | 1 | X | 1 | 10.00% | |||

K5 | 1 | 1 | X | 2 | 20.00% | ||

Total_SUM | 10 | 100.00% |

**Calculating the Weights**

With the matrix of comparisons in hand, you can calculate the sum of “1”s for each criterion.

In our example, “Webshop Integration” has a sum of 4. The total sum for all criteria is 10.

We can calculate the weights by using the formula:

Weight = Criteria_SUM / Total_SUM

For “Webshop Integration” in our example:

Weight = 4 / 10 = 0.4 = 40%

These weights represent the relative importance of each criterion in the software selection process. The larger the weight, the more important the criterion.

Assigning weights to criteria in the software selection process is crucial for making informed decisions. The pairwise comparison method provides a systematic and structured way to determine these weights, ensuring that the chosen software aligns with your organization’s specific needs and priorities. It’s a valuable approach that brings clarity to the decision-making process and helps you select the software that best serves your business.

– **Integration with Webshop** (Must-Have): Weight = 40%

– **Ease of Use** (Important): Weight = 20%

– **Custom Dashboards and Reports** (Important): Weight = 10%

– **Multi-Channel Sales Tracking** (Important): Weight = 10%

– **Vendor’s Support and Updates** (Must-Have): Weight = 20%

## Estimate How Well Each Option Fulfills the Criteria

Now that you’ve defined the criteria and assigned weights, it’s time to assess how well each option meets these criteria. You can create a scoring system (e.g., on a scale of 1 to 5) for each criterion and apply it to your software options. Here’s a simplified example:

Criteria | Option A | Option B | Option C |
---|---|---|---|

Integration with Webshop | 4 | 4 | 3 |

Ease of Use | 4 | 5 | 3 |

Custom Dashboards and Reports | 4 | 3 | 4 |

Multi-Channel Sales Tracking | 4 | 4 | 5 |

Vendor’s Support and Updates | 5 | 4 | 3 |

## Calculation of Overall Scores

To calculate the overall scores, multiply the ratings by the assigned weights and sum them up. For example:

Option | Calculation | Overall Score |
---|---|---|

Option A | (4 * 0.4) + (4 * 0.2) + (4 * 0.1) + (4 * 0.1) + (5 * 0.2) | 4.2 |

Option B | (4 * 0.4) + (5 * 0.2) + (3 * 0.1) + (4 * 0.1) + (4 * 0.2) | 4.1 |

Option C | (3 * 0.4) + (3 * 0.2) + (4 * 0.1) + (5 * 0.1) + (3 * 0.2) | 3.3 |

In this example, Option A received the highest overall score of 4.2, making it the highest ranking choice based on the defined criteria and their respective weights.

Incorporating the cost factor into the software selection process is a crucial twist. Let’s adjust the scores accordingly based on the new information:

## Consider the cost

Now, let’s incorporate the cost factor:

Criteria | Option A | Option B | Option C |
---|---|---|---|

Integration with Webshop | 4 | 4 | 3 |

Ease of Use | 4 | 5 | 3 |

Custom Dashboards and Reports | 4 | 3 | 4 |

Multi-Channel Sales Tracking | 4 | 4 | 5 |

Vendor’s Support and Updates | 5 | 4 | 3 |

Cost | $90,000 | $80,000 | $90,000 |

## Calculate the Value Score

To determine the value, we’ll divide the overall score by the cost (inverse for cost). The higher the value, the better:

Option | Calculation | Value Score |
---|---|---|

Option A | 4.2 / $90,000 | 0.047 |

Option B | 4.1 / $80,000 | 0.051 |

Option C | 3.3 / $90,000 | 0.037 |

**Note: **To make reading easier, the value scores above are shown as “per 1000$”.

Based on the total scores and estimated costs, Option B has the highest value score, indicating that it provides the best balance between the selection criteria and cost. Option A, despite having a high overall score in criteria, falls behind due to its higher cost.

In this case, if the company wants to optimize value by considering the budget, Option B would be the recommended choice.

## Conclusion

The detailed selection stage of the software selection process is essential for making an informed choice that aligns with your business’s specific needs. By defining selection criteria, assigning weights, estimating how well each option fulfills these criteria, and calculating overall scores, you can confidently select the software that best suits your requirements.