Can free business software products and services really replace current products and services that businesses are paying for today? The answer is of course they can, and the number of such products is growing. If you are faced with “free” competition, you need to take a good hard look at your business and decide how you defend your right to continue to charge. If you are considering using a free service for your business this article will provide a framework to review the issues to consider before making your “purchase”.
In this second of two articles we take a step by step view of the questions that you might need to ask to understand how well a free product or service may suit your needs.
Is the free product peripheral or core to the supplier’s portfolio of products?
If the free product is peripheral to the main product offering, it’s unlikely to be supported or easily adapted to the needs of your business. You also need to ask what expertise is available to help you.
If the free service is directly related to the providers’ core product, it’s likely to be well supported. What’s more likely is that it’s a limited version of the paid service. Make sure that your really take the time to understand where this limitation might be and how important it is to your specific needs.
A popular use of free products/services is to obtain experience of a new process from a zero base. This is a great and (for many) enjoyable way to learn. You can develop your understanding in your own time and at your own pace. The only caveat is that it might not be the most effective use of your time.
One of our core products for example is customising and administering 360 degree feedback systems. 360 feedback is used within leadership or behavioural development programmes. We provide a free (honest!!) Behave! framework that provides clients with all the questions they need to ask to establish the kind of system to suit their business, thus saving a lot of time in preparation.
What are the user limitations?
You may find that only a small number of users can access the free product. Do you know how many users there may be now, or a year from now? Will the limited access cause problems now or in the future? Perhaps the paid service could repay itself in productivity gains from wider access?
What are the project/scope limitations?
Free products may limit the number of projects you can work on. If your business is small this may not be a problem, but for larger companies this is likely to reduce the value of the product. If you think you will need capacity for more projects in the future, check how you upgrade to the paid product or service without loss of data.
What are the time limitations?
Your free service may be time limited, giving you access to the product for 30 days for example. After this trial period you will need to upgrade or stop using the product. Will you lose data, or have difficulty restoring data to your previous platform? Remember, you may also lose the value of initial data entry costs, only having to key the data into another system if you choose not to upgrade.
Who owns the data?
Loss of control of business data can be damaging and costly. Find out if any of your data is stored in the cloud or on a remote server and what terms, conditions and privacy apply to that data. If you decide the product isn’t for you and want to change, how would you get your data back or protect it – can you download it or delete it? With sensitive data from a 360 degree feedback system this may be a critical issue.
What’s your investment in the relationship?
You may only be asked for your contact details, but you may become tied in through your investment of time, data and integration across your network or team connections. Make sure you know the extent of your involvement with the supplier and how much contact they expect to have with you.
What standard features are missing from the free product?
Are all the features expected as standard in your industry included in the product? If you’re not sure, ask specifically if any standard features are missing from the product and what might be expected as standard in your industry. The answer should give you confidence in your decision to trial the product or not.
Is the product supported?
The product may be entirely suitable for your needs, but may not offer any direct customer service, may only give limited service or may give a full support service but only in an unacceptably long time frame such as 48 or 72 hours. Unsupported products can cost businesses dearly in lost time and productivity.
As an example for our kind of business many organisations forget that staff will often complete their 360 degree feedback out of office hours. One area that many businesses forget to specify and relatively few free services can afford to support.
Is the product still being developed and can it be upgraded?
Some free products are free quite simply because they are no longer supported and all development has stopped. Once you start using them that’s pretty much it, with no option for an upgrade. If you outgrow the capacity of the product, or if your needs change, you may have to write off your investment and start all over again with a new system. This might happen very quickly or it may not happen for several years. Actually in either case the loss to you is minimal or you will have had a great return on your investment. The worst case case is if the limitations start to surface once you have committed it to be an integral part of your business.
It’s always worth checking what upgrades are available, how easy it is to upgrade and if there are any further developments in the pipeline.
How easy will your exit be?
If you’ve uploaded or formatted data, trained staff and/or integrated the product or service into your business your exit may be difficult and costly. If the data remains with you and/or the system doesn’t need any staff training and the system stands alone, then your investment may be sufficiently low for the exit risk not to be an issue. Always check the cost and process capability of any system to provide you with your data when you decide you want to leave.
Our company provides this service for free (there’s an irony!!). Again an area that few people take the time to check when considering the free competition available.
These questions should help you work out if the potential risk from using free products is outweighed by their value to your business.
Only when you understand the level of your investment in a free product can you judge if free is a price you are willing to pay.
We are proud to supply fully serviced, custom 360° Feedback systems, Customer, Engagement and Exit Surveys and supporting Blended Learning systems. We don’t provide a free service, but we believe that we do provide brilliant value, for those clients who need something beyond free.