What is the real cost of your Corporate Performance Management software?
We recently learned via one of our prospects that a competitor was cutting their prices and consistently offering a 50% discount on their CPM application. This would appear to be a strong commercial argument, and yet… When you really think about it, what does the price cover? Does it really reflect the final acquisition cost?
There is, of course, a price on the label, in the offer, in the catalogue and on the contract. But does it reflect the real cost of what you’re buying? When considering the purchase of consolidation or planning software, it’s worth asking the following questions when evaluating the real acquisition cost, that is, the total cost (and not just the actual price provided at purchase time):
- Is the application updated regularly with new functionality every year? Or is it an application at the end of its life-cycle, simply being maintained? What will happen in a few years? Will you have to change applications?
- Is the application easy to master? Can it be administered internally? How much time will implementation and training take, how many people will be required, etc.?
- Changes in scope, the addition of new users and currencies, new projects… Will my teams be able to configure the application themselves when necessary or will we have to hire outside consultants (additional cost and time to be taken into account)?
- How good is support? Is support provided in my country? Do the support people have business line experience?
- Are user days held on a regular basis to inform customers of the latest developments and share experiences?
In our case, yes. True, we don’t discount our application by half, but that’s because it’s constantly being improved. Research & Development entails significant costs as do technology advances. Among other things, new functionality must be integrated, ergonomics improved and modernised to facilitate use, changes in technology must be considered, amendments to legislation and to local and international accounting principles must be monitored, and more support and business intelligence must be provided in the tool.
Would you risk buying obsolete technology today from a supplier who is no longer investing in the future?
The acquisition cost of a CPM application goes well beyond the price shown in the contract. Does a discounted price at the outset guarantee a cost-effective investment over time, a long-term relationship and the availability of precious expertise and daily support? Keep this in mind when you send out your next call for tender!