Software…the bane of our existence! No wait, that’s healthcare or Google Buzz? In any case, to quote myself, “There are three primary struggles when it comes to the business value of your applications: usability (learning how to use the product combined with what it can and cannot do for you), cost (upfront and ongoing), and support.” Lets talk about cost and support.
There’s not much point in belaboring upfront cost. This is usually obvious and painful. There are myriad factors to determining which application is best for your business needs, but I can’t speak to that with authority unless you hire me as your contract CIO for a very reasonable fee. However, I would like to suggest that ongoing support costs, the longevity of the product, the support lifecycle and your support relationship with the vendor are oft overlooked and may even be more critical than the upfront expenditure.
You should expect to spend in the range (this is a generalization but generally accurate) of 10-20% of the total cost of the application for support per year. This varies somewhat depending on whether you are paying strictly for support or for support with software assurance. These numbers are negotiable and the best time to negotiate them is when you are considering writing the vendor a very large check for the initial purchase! Although, in this current economy, vendors are more flexible and willing to re-negotiate to retain your business.
Attempt to get a service-level agreement (guaranteed response times, guaranteed uptimes, penalties for failure to meet the SLA). Negotiate support payments for the duration you anticipate using the product (two years, five years, etc). Often vendors will agree to a fixed price for year one with a cap on percentage increase for the remaining year or two or three. Make certain you understand the product roadmap. How long do they anticipate supporting this product? How does the vendor manage planned obsolescence, because even if they won’t admit it, they do!
Once you are confident you have negotiated the best possible deal and are secure in the details for the support and maintenance agreement: buy it. Buy it the first year, the second year, the third year…you get the idea. Relate to is as a business requirement. If you are going to use the application as a business tool, you must keep it in good working condition. You must keep current on the fixes and updates. You must have someone to call who is an expert with the product, can answer your questions, give you instruction and fix it when it breaks. Don’t call me! Don’t call your aforementioned uncle Larry, unless he happens to be an ex-employee for the vendor in question! Call the experts and get to work.
