3 Keys to Reducing Spend on Your Project Control Solution in a Recession
May 2020 | Version 01
When making a decision to initially invest or renew your contract with a vendor, it's critical that you
receive an accurate picture of the company's financial health. You want to make sure that the
project management system you rely on will be there five years from now when you're neck-deep
in a build.
Here are some questions to consider asking your top vendors:
What is the organization's operating margin? After deducting the costs of development
and production, this metric reveals how lean and efficient the company is. It helps provide
an understanding of how strict they are on cost control.
What is their net profitability? Many software companies can survive for a decent length
of time solely on the dedication of investors. But the long-term success of the company
will depend on their net profits.
How does their net profit margins compare to similar industry competitors?
What is the company's liquidity position? In other words, how much cash on hand
(or easily convertible assets into cash) does the company possess?
What is their solvency ratio, also known as their ability to meet long term financial debts
in ratio to their cash and assets on hand?
When evaluating a software solution, it's important to assess the entire product experience.
The product experience includes the product itself (feature sets, integrations, capabilities, etc),
the company's track record and industry experience, and the financial health of the organization.
2. Research the Financial Health of Vendors
"YOU'RE NOT JUST
PURCHASING A PRODUCT.
YOU'RE INVESTING IN A
LONG-TERM PARTNERSHIP."
