Whether you are a large-scale business or a startup, embarking on a digital transformation has become the norm – a necessity, even – to remain competitive in a local or global scale.

The first crucial step, however, is to identify your third-party software system provider. Amid a sea of providers, how do you choose which company would best serve your purpose? The International Data Corporation, a market intelligence for IT, telecommunications and consumer technology markets, lists five best practices for selecting SaaS (Software as a Service) and cloud-enabled solutions.

1. Know your requirements and don’t be afraid to customize the package that you need. The default of many businesses is to choose the standard package, thinking that what is out-of-the-box is enough to cover all of their necessities. In reality, though, a flexible, agile software system is one that is configured for your personal needs. A reliable solutions provider will not balk at customizing their options to meet your requirements.

2. Look for technology that works immediately, regardless of whether you had it customized or not. A product that cannot be used immediately should not even be considered when making your selection. Also, confirm with your vendor how long the migration process will take, from your on-site solutions to SaaS and cloud-based solutions.

3. Ask your peers for references and know what your competitors are using. Your business should not become a laboratory test for a new product with no history of what it can accomplish and what challenges it has hurdled. A provider that can satisfy your requirements is one that understands your needs.

4. Negotiate on price, but don’t make cost your determining factor. When choosing a third-party solutions provider, remember that nothing is too good to be true. While budget is always a factor, choosing a product that has industry-expertise will deliver a better outcome, thus justifying the premium. Factor in the cost of support services as well in negotiating the price.

5. Ask for help, especially if your business is not as adept with SaaS and cloud-enabled solutions. Tapping external advisors will help your enterprise in researching, vetting and choosing the right vendor. For very large businesses, you may even need a consultant to help your organization with the transformation and change management.

SaaS and cloud-enabled technology solutions are more agile, user-friendly, and scalable than your legacy on-premise systems, thus ensuring continuous innovation. Just as these have become requirements for any business that aims to thrive in a digital economy, choosing the right solutions partner is also a crucial component of your organization’s digital transformation process.