Knowledge Base

Budget

If you are thinking about upgrading your Accounting & Business systems and wondering how to set a budget for the project, this article is aimed at you.
There is no calculation you can use to accurately establish what is would cost, nor can you phone a few suppliers and get a good estimate. At best you will end up with a: “somewhere between X & y”.

Here are a few steps you can take to help you get a better idea:

Step 1: Realise the elements of the overall cost!

Reseller/Vendor Costs

Software Costs: Most suppliers will charge you an ‘Initial License Cost’ for the software. This is mostly payable on order. It makes up anything between 30-60% of the overall solution cost

Annual Software License: Software companies charge a yearly fee for use of their software. Most systems on the market are licensed in this way.

Telephone Support: The reseller you buy the system from might charge an additional annual fee for telephone support.

Services from Reseller: The services required to implement the system can be the biggest cost. It is usually quoted as X number of days at a daily rate and include Project Management, Installation, Design, Training, Report Writing etc.

Internal Costs

A critical cost which is mostly overlooked is the internal cost of time & resource to make the system implementation a success. Most companies try and implement a system by getting staff to spend a little time on the project, now and again, resulting in varying degrees of failure.

Many system implementations simply end up as old replacing the old. No real improvement is gained because the company did not take the opportunity to improve processes.

Internal costs should include:
• Backfilling staff member so they can manage the project
• Slowing down the project so staff can handle the extra workload
• Employing independent consultants
• Buying more time from the reseller

If you are considering a new system and don’t anticipate the internal cost, you could end up spending a lot of money and the business not really gaining any benefit.

Step 2: Call independent specialist and discuss it with them, don’t phone random suppliers!

As an ex-sales consultant I am aware that people like you to say what they want to hear. So I would always establish what the customer was willing to spend, and explain that we had a solution at that cost.

All sales consultants are trained in that way...
Solutionz Source is happy to take calls and provide free advice on how much you can expect to pay. We can only give you a good guess after we know a bit more about your business, so might have to ask you some questions.

Published by:
Solutionz Source Ltd
Suite 13024, 2nd Floor
145-157 St John's Street
London
EC1V 4PY

t: 0800-408-3925
e: info@solutionz.co

© Copyright 2010
This article is protected by copyright laws and may only be reproduced in it's current form. It is to be used for information purposes only and any alterations and re-publication is forbidden without prior consent. The information in this guide is based on the experience of consultants working with Solutionz Source Ltd.