Abstract
As competition in the service sector increases, companies must provide services more effectively and at a lower cost. Computer systems, once seen simply as a cost of doing business, are now viewed as a tool for improving existing services and even for forging new service products. This paper draws on recent research, which describes and explains managerial challenges in procuring effective applications software for use in service companies. There are no cookbook solutions to these problems and, rather than prescribing specific solutions, it addresses the dynamics of the software procurement process; identifies problem areas, including potential traps; and outlines what senior managers can do to make the procurement process more effective. Regardless of whether a company's primary concern is productivity or customer satisfaction, senior managers can expect a significant payoff from their own early involvement in the procurement of mission-critical software. Involving all levels of users, especially those providing direct service-delivery functions, is particularly important.