Issue 5 of The First Step towards Digitalised HR
Understanding the costs incurred gives you power and a good bargaining position. Is project management an added extra? What is the monthly cost during the configuration stage? What is the price per user? These things cannot be too clearly stated. We often present our offer as follows:
Implementation fee: A one-off fee to set the system up for the customer. Also included here are specifications, manuals, languages and a test system where the customer can try new functionalities in as they are configured.
Consultancy fees: Project management and systems development. We often offer project management packages combined with the implementation or even offer it as part of the implementation fee. This is a cost that tends to be underestimated; ask the supplier to show their hand to avoid expensive surprises further down the line.
License fee: A monthly fee per employee that covers the running of the solution for all users. This fee is based on for example the size of the organisation and the amount of functionality in the system.
Service fee: A monthly fee per employee that covers support, troubleshooting, updates and service. Service and license fees can be combined depending on the format of the contracts.
To aid a comparison between different pricing options we, as with most investments, like to talk about Total Cost of Ownership, TCO. This is where the implementation costs are accounted for and summarised, which points out any inconsistencies and shows if something is more beneficial than it first seemed.
Don’t forget to negotiate!
Ellen at Verismo