Buying Software Is Often Not the Best Solution

A friend in the industry shared a failed expense management project today. It’s the second such story I’ve heard this month. I'm recounting it here as an example of when to build a thin solution around your existing backend systems rather than buying software. The failed package selection, implementation, and training project took 12 months and wasted over $200,000. I've seen a similar problem solved in the corporate world in less than a month for under $40,000.

The problem in all these situations is the huge amount of manual work and triple keying of client expense information to control and approve expenses and ensure they are reimbursed in client billing. Because these processes are manual and involve several teams, there's always a heavy tax in supplemental reconciliation work downstream. In one case, there were three sets of individual reconciliations at different steps. I estimated at least one full FTE was needed to keep this process together across a couple of programs.

Most non-technical people understandably think in terms of solutions (expense management software) rather than evaluating the complexity of the problem itself. This is often true of many people in IT as well. Jumping to software package solutions without considering other options is very costly. It's costly in terms of time, as buying software adds 6 to 12 months to the timeframe. It's costly financially, as package selection, implementation, and training often cost hundreds of thousands or even millions of dollars. Most importantly, it's costly in terms of the load it puts on operations staff throughout the process.