The True Price of Acquiring New Construction Software

Purchasing new construction software can be expensive, but many people don’t even realize all of the associated costs.  There are a number of costs that are not identified with the purchase price of the actual software that many companies fail to account for.  To get an accurate idea of how much the new software is really going to cost, these costs must be accounted for up front and built in to the new software budget.First, software buyers are often uneducated about the costs to train staff and implement the new software.  In many cases, these costs are at least as much as the software itself, meaning a $5,000 system may end up costing $10,000 by the time your staff is properly trained and the software is implemented.  A more complex system could even cost as much as five times the purchase price to properly implement and train.  Once companies realize how expensive these additional costs can be, some try to skimp on training and implementation, which is almost always detrimental to getting the most from the new software.Sometimes it is necessary to hire new staff to run the new software.  Existing employees are typically expected to learn the new software, but sometimes people with a different skill set are required to serve administrator roles.  Of course, with more employees or employees with a higher skill level will come higher payroll costs.  Ideally, these additional costs can be offset by gaining additional efficiencies using the new software, but this is not always the case and often takes time to accomplish, meaning these costs will affect a company for some period of time.  Refusing to hire the new employees is not an option as a system operated by unqualified personnel is a recipe for disaster. Third, most vendors charge an annual fee to maintain the construction accounting software that they sell.  These costs are usually somewhere between 18% and 24% of the software’s purchase price and can add up after several years.  Additionally, some vendors will charge an extra cost to generate custom reports for companies.  Remember to account for these costs when budgeting for the new software so they do not come as a surprise down the road. Many construction companies incur huge costs when they purchase the wrong software.  The worst part about these costs is that since they involve paying for software that doesn’t do what you want, they are costs that are never associated with purchasing new software and are essentially wasted money.  For example, if you purchase a new system that does not integrate with your accounting records, you will have to maintain two copies of the data and twice as much time to maintain and use that data.  The lost time could be considered an “opportunity cost” but the extra labor costs will be very real.  Make sure you do your research and get the right construction software!Finally, some companies that get new software realize that they do not like the way that the software performs certain functions and begin to develop their own spreadsheets for these tasks instead of changing their processes to work with the software.  Again, the additional time require to use these other programs takes away from productivity and adds payroll costs that can be avoided with proper research.Before purchasing new construction management software, make sure that you are aware of all the real costs and potential costs of purchasing software that is inadequate.  Proper training pays off quickly and should never be avoided, so long as it is accounted for up front.  Beyond that, make sure you understand ongoing maintenance fees and ensure that you get exactly the right software that you need to avoid spending more on new software than you gain from it.

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