Software Selection and User Satisfaction
Relevant Factors for Decision
By Fara Elikai, Daniel M. Ivancevich, and Susan H. Ivancevich
MAY 2007 - Accounting
software packages are standard tools in today’s business environment.
Selecting the right software, however, can be challenging. Price
and performance often vary significantly. It can be difficult to
identify which software would best fit the needs of an organization.
Finding software with the right features to help streamline operations
and that is not overcomplicated to use requires a rare balance (see
Randolph P. Johnston, “A Strategy for Finding the Right Accounting
Software,” Journal of Accountancy, March 2003). The
costs of poor decisions—user frustration, resistance, or reduced
productivity—can be high.
purpose of the study below was to provide insight into which factors
and features are most important to users in selecting, retaining,
or changing accounting software packages. The survey also asked
respondents to identify the most satisfying features and those
that most need improvement. The authors also compared the software
ratings of large versus small firms to identify key differences
between the two groups.
contacted members of the Institute of Management Accountants (IMA)
located in the southeastern United States to identify interested
participants. Detailed questionnaires were sent out and generally
were followed up with a phone interview. In total, 57 individuals
participated. Based on the diversity of demographic characteristics
of respondents (i.e., industry, size, and geographic location),
the authors have no reason to believe the sample is not representative
of nonrespondents and the population as a whole. Demographic information
for participants is shown in Exhibit
1 shows that controllers comprise the largest category of
participants, followed by managers, accountants, and financial
directors. The average age of participants was about 44, and they
had about 20 years of experience overall and about five years
of experience in their present job. All but one had a bachelor’s
or master’s degree.
category of participants came from the manufacturing industry;
remaining participants were scattered fairly evenly among other
industries. Roughly 40% of the participants’ companies were
located only in the United States, while approximately 60% had
international operations as well. Only one company had no presence
in the United States. The size of the companies (based on sales)
varied from less than $10 million to more than $1 billion. The
number of accounting/finance employees in the surveyed companies
varied from less than 10 to more than 200, with most companies
employing less than 50 people in accounting/finance.
were asked which software packages they currently use. Exhibit
2 shows that a total of 63 different packages were cited and
no one package was dominant. Because participants were asked to
fill out the survey for each type of software used, 97 responses
were tabulated. QuickBooks, SAP, PeopleSoft, and Oracle were cited
most frequently, followed by ADP, Great Plains, JD Edwards, and
Peachtree. The remaining 50 packages were used by two or fewer
2 also shows that the various accounting packages used by
each company were fully integrated in 65% of the cases. The most
common operating system platform was Windows (84%), followed by
were then asked to rank the importance of major categories from
1 to 6 (1 being “most important” and 6 being “least
important”) to indicate the broad factors they considered
in selecting a primary accounting software package. As shown in
3, functionality/capability (which includes flexibility/customization)
was rated as the most important category by a large margin. Cost
was rated as next most important, followed by compatibility with
other software. Contrary to the findings of prior research (J.
Carlton Collins, “How to Select the Right Accounting Software,”
Journal of Accountancy, August 1999), vendor stability/viability
and vendor support were rated less important to users. While the
authors considered user friendliness part of functionality/capability,
some participants listed it separately under the “other”
of Individual Features Within Major Categories
were next asked to rank detailed features within each category
(as chosen through review of the literature and consultation with
IT experts). Exhibit
4 presents the detailed features by category, in the order
they were ranked above.
4 shows that flexibility (customization) is rated as most
important within the functionality/capability category by a large
margin. Companies seem very interested in ensuring that any new
software selected could be adapted for effective use in their
individual business. This finding is not surprising given the
critical role that accounting software typically plays in businesses
today. Real-time processing, user friendliness, security, and
the ability to upgrade are also rated as very important features.
Interestingly, multicompany features, web access capabilities,
international capabilities, and graphics are rated as relatively
unimportant. This finding may be a function of the demographics
of our sample, as small firms are less likely to value such capabilities.
(Comparisons by firm size are provided later.)
the cost category was rated as second most important in accounting
software selection. Exhibit
4 shows that the cost of the initial purchase and annual operating
cost were considered more important than installation and training
costs. Installation and training costs may have been rated lower
because of the type of software packages prevalent in this survey;
that is, software that accountants may already be proficient with.
compatibility category, ranked third in overall importance, compatibility
with the operating system was rated as more important than compatibility
with hardware or with other software. This finding is not surprising,
given that incompatibility with the operating system could render
the software essentially useless. The authors have anecdotal evidence
of many companies accepting some incompatibility with other types
of software as long as the software met a strategic need. For
example, it is not uncommon for certain data to be compiled using
software that may not interface with the general ledger package.
At a firm for which one of the authors worked, the company adopted
point-of-sale (POS) software that was incompatible with the general
ledger software. The company liked many of the features and controls
in the POS software for use in its food-and-beverage outlets,
so it was purchased anyway. To record sales from these outlets,
the company manually compiled sales information from register
tapes into an Excel spreadsheet and then manually recorded the
summarized entry into the general ledger system.
4 shows that a vendor’s reputation is the most important
factor with respect to evaluating vendor stability/viability,
and technical vendor support is the most important factor with
respect to evaluating vendor support, followed by user manuals
and technical documentation. Interestingly, online help and warranties
were not rated as important.
with Current Software
to better understanding which factors and features are most important
to users when deciding on software, the authors also wanted to
identify which features of users’ current software they
were most satisfied with. To assess user satisfaction, participants
were asked to rank the top five features of their current software.
5, flexibility was rated as the top feature for user satisfaction.
Real-time processing ranked second, followed closely by purchase
price, annual operating costs and multibusiness unit functionality.
Interestingly, all five of these items could be found in the top
two categories of important factors in software selection as shown
3. Similarly, four of the top five items (flexibility, real-time
processing within the functionality/ capability category; purchase
price and annual operating costs within the cost category) were
rated as the two most important features within their category
(as shown in Exhibit
4). These results show that companies tend to be satisfied
with the features most important to them.
then asked users to identify the five features they would most
like to see improved in their current accounting software package.
5 shows the most commonly identified area for improvement
was report-writing functions, followed by flexibility, annual
operating cost, user manuals, and compatibility with other software.
It is interesting that both flexibility and annual operating costs
were among the top five features for both satisfaction and needing
improvement. On the other hand, report writing, user manuals,
and compatibility with other software were not considered as important,
but still ranked high in terms of needing improvement. It is possible
that these findings may be related to the lack of emphasis on
training, which in turn may lead to lack of productivity or knowledge
related to the capabilities of the software.
Retention and Change
also asked about users’ plans to change software. Of the
57 respondents, 18 (32%) indicated that they had recently made
or planned to make software changes. These respondents were asked
to rank the top five most important features in their decision
to change software. As shown in Exhibit
5, flexibility (customization) was rated as most important,
followed closely by transaction volume, compatibility with other
software, report-writing functions, and purchase price. Interestingly,
report-writing functions and flexibility were also rated as the
top two items with which users were least satisfied. The items
ranked highly in terms of dissatisfaction are correlated to items
ranked as important when changing software. These results also
support a finding that functionality/
capability is the most important overall category for software
selection, given that four of the top five most important features
when changing software come from this category (only purchase
price is unrelated). Last, the survey investigated why companies
do not change software. For those companies that had not changed
software recently and did not intend to change in the near future,
the survey asked their reasons for not changing. As Exhibit
5 shows, the primary reasons for not changing software are
the costs necessary and the disruption and hassle to the business.
The next-most-important reason was that the users were satisfied
with their current software. Many users also thought that the
effort necessary to convert data was not worth making a change.
Finally, many users thought that better products were not available.
Overall, it appears that potentially negative effects of changing
software weighed heavily in the decision not to change software.
of Firm Size
partitioned the survey data based upon company size. The number
of finance and accounting personnel employed by the company was
used as a proxy for size. The authors chose this variable because
they believe that it is a better proxy for size and complexity
than total sales, because more accounting and finance personnel
would be needed as the complexity of engagements increases. The
survey sample was partitioned into two groups: companies with
less than 10 accounting/finance employees (27 respondents) and
companies with more than 10 accounting/finance employees (28;
two companies did not provide data). The differences between these
two groups are presented in Exhibits
6 and 7.
6 shows the key differences found in the mean ratings of factors
and features by large versus small companies. As shown in the
table, the only overall category where large and small firms differ
in their importance rating is vendor stability. Large businesses
rate this category as more important than small ones do, possibly
due to the higher complexity of operations typically associated
with larger companies. With respect to specific features, several
differences stand out. The most significant relate to international
capabilities, user friendliness, and technical documentation.
Large companies rated these features as more important than did
small ones. Similarly, large businesses rated transaction complexity,
multibusiness unit capabilities, and multicompany capabilities
higher than did small businesses. Many of these findings are not
surprising, given the tendency of larger entities to have more
international operations, more business units, and more affiliated
companies than do small ones. Similarly, technical documentation
may be more important in settings where complex features of the
software are being used.
Alternatively, small businesses rated user friendliness, graphics
capabilities, real-time processing, and report writing as significantly
less important than did large businesses. It is possible that
larger companies have the resources to purchase software with
enhanced capabilities in these areas, whereas smaller companies
may be purchasing software with more-limited capabilities.
As a final
comparison between large and small companies, the authors evaluated
the two groups’ top five areas of satisfaction, areas needing
improvement, and reasons for not changing software. The results
of this analysis are shown in Exhibit
7. In terms of the top five areas of satisfaction, the findings
correlate well with the earlier results. Key similarities between
the two groups include satisfaction with flexibility and with
operating costs. Differences exist with respect to several areas,
however. Larger companies identify real-time processing, and multibusiness
unit and multicompany capabilities as key areas of satisfaction,
which may be related to their higher degree of business complexity
and software capabilities. On the other hand, the inclusion of
user friendliness, purchase price, and technical vendor support
in the list of features with the highest satisfaction may be an
indication of less business complexity and less sophisticated
software on the part of smaller companies.
of areas needing improvement, Exhibit
7 shows that large firms identify annual operating costs,
user manuals, flexibility (customization), installation cost,
user friendliness, and technical vendor support as the features
to focus on. Small companies cite report writing, flexibility
(customization), user manuals, annual operating costs, and security
as their key features needing improvement. While there are differences
in rank orders, the only differences between the two groups are
that large firms mention user friendliness and technical vendor
support, while small companies include report writing and security.
Once again, these differences may be driven by differences in
business complexity and software capabilities between the two
7 shows that both groups identify the costs, hassles, and
data-conversion efforts associated with changing software as key
barriers to deciding to change their software package. Both groups
are also highly satisfied with their current software. The only
difference in the top five reasons for retaining software (aside
from small differences in the number 1 and 2 rankings) is that
large companies also identify integration with other application
systems as a key reason, while small companies note that lack
of availability of better products can be a reason. In sum, the
reasons for retaining current software packages are quite similar
between large and small companies.
examined the factors and features important in accounting software
selection, satisfaction, and change. In evaluating the data, several
key findings stand out. First, the functionality/capability of
software is the most important factor category to users in selecting
software, followed by cost and compatibility. Within the functionality/capability
category, the flexibility (customization) feature was rated as
most important by participants by a wide margin, while multicompany
features, web access capabilities, international capabilities,
and graphics were rated as relatively unimportant.
(customization) also stood out as a key feature of user satisfaction,
followed by real-time processing and price. With respect to features
in need of improvement, users were least satisfied with report
writing, flexibility, and annual operating costs.
For why companies
change their software, once again flexibility (customization)
rated as the most important feature, followed by transaction processing
capabilities. Not surprisingly, the primary reason companies do
not change software is because they are happy with their existing
software. Nevertheless, the costs, disruption, and effort required
to change are also quite important.
were also noted with respect to large versus small companies’
ratings of factors and features. Many of the items for which there
were significant differences seemed to be driven by size, complexity
of operations, or capabilities of software. Interestingly, the
top five reasons for not changing software were fairly similar
between the two groups.
stands out as being rated as relatively unimportant to users.
It appears users are much more concerned with how the software
fits their business needs than with the reputation and support
of the vendor. In other words, users appear to be attracted to
a great product that fully meets their needs, more so than looking
to a particular vendor in hopes of finding that its product comes
close to meeting their needs.
Elikai, PhD, is an associate professor, Daniel
M. Ivancevich, PhD, is a professor, and Susan
H. Ivancevich, PhD, is an associate professor, all at
the University of North Carolina Wilmington.