To create a realistic budget for CMMS software, you need to consider more than just the price of the software itself.
Typically, you’ll pay for the base software and then the number of user licenses you need. However, to ensure CMMS success, also consider five other costs…
- Startup training
- Integration services
- Data migration from legacy systems
- Maintenance/support agreements
To create a realistic budget, next consider the right pricing model for your organization.
Choose a Pricing Model
Any CMMS budget should also include one of two ways to purchase CMMS software—Software as a Service (SaaS) or licensed purchase.
If you choose subscription pricing via SaaS, you’re renting the software for a monthly or yearly fee. SaaS is a common option today—but it may not be the best one for you.
Advantages of SaaS
- Easier on cash flow up front and over the first 2-3 years
- May be able to purchase it without a formal procurement process (i.e., you’re just signing up for a service)
- You can try the product and the vendor without fully committing
Disadvantages of SaaS
- Higher total cost over the long term
- Vulnerability to price increases
- You never own the software
- Stop paying and you lose access
The other option is a licensed purchase, where you purchase a license to use the software (in practical terms, forever) for a one-time fee.
Typically, you will also have the option of purchasing or renewing a yearly maintenance agreement that includes software updates, tech support, hosting services, and access to training. It’s usually charged as a percentage of the software’s original price.
Advantages of Licensed Purchase
- Less expensive over the long run than the never-ending subscription. Usually it’s a 2-3 year break even vs. SaaS pricing.
- You own it. If your company’s budget gets tight one year and you don’t get your yearly allotment, you will still be able to use your software because you own the software license.
Disadvantage of Licensed Purchase
- Higher upfront cost
If you’re leaning toward SaaS model, ask vendors if you can switch to a license purchase model if your situation changes. Also, make sure the method you choose works with your plans to host the application.
Once you’ve chosen the right pricing model for you, start by asking sales reps to provide price-range estimates that include training, integration, data migration, hosting, and maintenance/support. The more specific you are about your needs, the more accurate those estimates will be.
These price range estimates will tell you if their product is a good fit. Then you can move forward with the companies who sell software in your budget range. You can ask a sales rep to refine the pricing as you get more specific about your needs.
Last, but not least, calculate the five-year total cost of ownership of all these things to get an accurate comparison between vendors.
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