It's impossible at this stage to determine the actual cost of a system. However, you can determine if you are talking about an Opel or a Rolls Royce. For this purpose it's essential you get real list prices of the vendors you consider purchasing software from, not some prices that already contain some discounts (you can squeeze them out later).

Two numbers are important for your evaluation of the software selection:

• The expected amount for acquiring the software (licenses!)
• The expected annual maintenance fee

If you don't know the exact number of users, just take a guess; remember, you are not calculating exact numbers, you want to compare them relatively against each other.  

All kinds of stuff can make this simple task of the selection process difficult; the pricing structures are probably not the same:

• Seat licenses (per workstation) or site licenses (for the complete system)
• Concurrent users (users working simultaneously on the system) or named users (user that are configured to access the system)
• Differentiation to modules you can use, or other certain parts of the functionality
• Dependencies on the annual revenue

It's incredible how creative vendors can be when active in software selection. Just make some assumptions, and try to get a fix; it's ok if you are a few cents off.

Going for the next round

You have finally reached the final ranking of your long list. The top should go to your short list for the next round, the request for proposal. I would go for three vendors, but of course, that's not a rigid rule.

Don't forget to thank the other vendors for their effort. The will like and appreciate that sort of thing.

This entry was posted on Saturday, August 25th, 2007 at 12:54 pm and is filed under Software Selection.