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The woes of specialty software.

The task of being a local area network (LAN) administrator is a difficult one, even under normal circumstances. It is even more difficult when products do not fully measure up to venders' claims. Experience has taught me that one area of the computer industry is more likely to be the domain of less reliable vendors than others. This is the area of specialty software. And obviously there are some strong exceptions to this. But, through this article I hope to share a recent experience, so that others in the mortgage industry may avoid the software pitfalls that my company and I endured.

What is specialty software? In an industry that is reaching saturation, it is nearly impossible to introduce a software product into the market without requiring millions of development dollars. There are, however, exceptions. The strategy that some small-to-midsized software companies employ is to carve a narrow niche into a specific type of business, such as a particular medical practice, manufacturer, retailer or industry. Though the customer base may be limited, smaller companies can avoid competition by targeting such narrow markets and make a profit.

As PC users, we have grown accustomed to a high standard of quality software purchased for a few hundred dollars. When software costs a few thousand, we expect a phenomenal product. We forget that software has traditionally cost in the thousands or even tens of thousands of dollars. It has only been the PC explosion that has made software affordable to the average person because the development costs are recouped by virtue of being spread over so many end users.

But contrary to our expectations, necessarily a quality product. For specialty software, a high price frequently means that competition is limited, or there are few sales to offset the development costs. My recent experience proves this point well.

The mortgage company I work for began having problems with the processing software when an occasional error would result in long lines of garbage to be written to the data file, rendering it useless. Because the files consist of text only, I soon developed an agility to edit and remove the offending portions, something not every user can do. Quickly though, these errors became very annoying.

The president of the software company personally promised that the "latest and greatest" version would solve our problems. I loaded the beta version only when I was assured that their product was in the last stages of testing at more than 50 sites.

I soon discovered that they certainly resolved the garbage problem. Three to five times a day, our data-entry people would completely lose a file. A directory listing proved to me that these files contained zero bytes.

The productivity in my company screeched to a low of 20 percent of normal. Because each file represents more than three man-hours of work, to lose a single file is significant. Not knowing when it will happen again is paralyzing. Because the mortgage business depends on meeting deadlines, we were in a crisis situation.

I spent three full weeks monitoring this package closely, helping users recover from its devastating effects. Then there was the daily communication between the programmers and myself. These two-side occupations accounted for most of my day.

The loss of time and money did not stop there. There was lost productivity that derived from the fact I could not accomplish certain tasks on the company's priority list. When these tasks are finally completed, they are sure to enhance the company's productivity. Not being able to accomplish them on schedule meant that time and other resources were not available to pull in new business.

And then there is an even greater loss - the loss of confidence by the users of the software in our company. Some even threatened to return to manual typewriters citing that they would be more productive. Even after our problems are resolved, there will be lingering distrust. These users will continue to call me for the slightest of anomalies for a long time to come. This translates into lost work time for both myself and the user. Thus inadvertently, this specialty software company has singlehandedly threatened our company's future. Without computers, our company has no hopes of remaining competitive. Without people using the computers, we have no hope of surviving.

How then can small specialty software companies survive? They do so by using many common practices. I have identified a few of these techniques.

The first technique is to convince you that you are the only one of their customers experiencing a problem. They imply that the problem is with either one of your operators, or with your hardware. Nine times out of ten, the real reason is bugs in the software. Because the average user of the product is not experienced, they are able to maintain a solid base of customers.

The second technique is to overstate their product's potential from the initial point-of-sale. This naturally comes from the drive to gain an edge over the competition by claiming a feature or enhancement the other does not have. In doing so, these software manufacture can sell more. This process discourages returning to rewrite or improve the program. In their effort to gain new customers, they neglect their present ones The end user is ultimately the loser.

The third technique is the realization on the part of the manufacturer that once you have purchased a product, you will be reluctant to lose your investment and start over. There is not only the initial dollar investment to lose, but also the time spent learning the product and inputting the data.

The fourth marketing technique i the promise of unlimited support for price. Frequently, to entice the novice user, these companies will advertise unlimited support and free upgrades for an annual fee. More often than not, what you are really paying for is the privilege to support them. Instead, you become their quality control department when you find the bugs for them. When you call to report a problem, they are pleased to send you the new code so they can restart the cycle.

Small specialty software manufacturers tend to inadequately staff their quality control department. Quality control departments cost money. It is understandably the objective of every business to make money, but unfortunately the profits are booked, sometimes, at the expense of the quality of the product.

Everyone who uses a PC has grown accustomed to an occasional bug. When a bug results in the destruction of data, it is significant. No Fortune 500 company could survive the publicity. The situation, however, for small companies is quite different. Nobody pays attention. They may lose a couple of customers, but there will always be someone else to buy their wares.

The following are a few simple rules you can follow to help ensure you are buying a solid product.

* Always ask to view the product firsthand. Examine the product yourself and bring along a knowledgeable friend. If the product is difficult to understand, don't assume the problem is you. I have seen many software packages that do not have a user-friendly interface.

Don't be shy about asking to put the product through the paces for a week or more. If the price bracket is too low for the company to afford to give you a personal demonstration, ask to visit one of their customer sites.

* Don't be afraid to ask real questions. Real questions include: How much will your product enhance my company's productivity? Don't get on the computer bandwagon just because your competitor down the street just bought a new computer system. You are looking for real savings.

* Use referrals. Certainly if I was a doctor and I knew of another practice that was using and satisfied with a product, my decision would be very easy. Putting a software product through a full simulated test is the only real way to determine the product's value to your company.

* Beware of signs that the software package is a homegrown variety. Thus, it is a product that began in the basement of a part-time programmer. Software packages developed under certain languages are adequate if they remain small, but soon grow costly to improve upon when they become sizable enough to be sold.

Furthermore, software buyers might note that historically BASIC does not respect the boundaries in memory that DOS has allocated to it. Moreover, the language, by and large, lacks optimizing feature, which results in larger and slower programs.

* Unlimited support is never what is seems. Frequently, this may be an indication that the software is not adequately tested in-house.

If you do choose a company that offers such a policy, I highly recommend that you follow this one rule. Never, never be the one to complain the most. This is a sure way to be rewarded with the privilege of being next in line for the beta test of their newest version.

I am happy to say that the tribulations my company experienced have finally drawn to a close. It is my wish that readers will avoid the losses that we incurred. Remember, until these software manufacturers realize that they cannot make money without producing quality, they will not change.
COPYRIGHT 1992 Mortgage Bankers Association of America
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Leitgeb, Lawrence J.
Publication:Mortgage Banking
Date:Dec 1, 1992
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