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What’s the Difference between Price and Cost when Buying Helpdesk Software?

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It’s an age old problem. The difference between price and cost is always a challenge to explain, but as technology progresses with smart phones, tablets, artificial intelligence and cars that drive themselves, you would think that we as tech buyers would have progressed with our attitudes towards the price/cost equation when it comes to the procurement of software. But, you’d be wrong.

At Cherwell Software™, we routinely receive Requests for Price (RFPs), Requests for Information (RFIs) and public tenders for our ITSM software, Cherwell Service Management®. Many of these documents openly put a huge emphasis on price above and beyond the functionality of the solution. I have seen as much as a 70% weighting being attributed to the proposal price of the solution. Solution functionality is important, but this emphasis on price makes the importance of functionality pail into insignificance.

The things organisations should consider when purchasing ITSM software are many and varied, and it’s important to note that costs can quickly increase to be “off the scale” when compared to the original purchase price. In addition to the ongoing costs of managing and supporting the software, buyers should consider the intangible costs that come about as a result of a lack of functionality.

For example:

  • Imagine not being able to get meaningful reports out of the system.
  • Imagine not being able to configure the product to the organisation’s process requirements, except by employing a contractor or vendor at a cost of $1500-$2000 per day.
  • Image not being able to invoke the organisation’s SLAs.
  • Imagine having to pay extra for additional processes, web self-service and multiple dashboard views to expand and mature your service offering.

With this huge emphasis on price at the start of the process, it shouldn’t be a surprise to anyone that once a contract is awarded, it takes only a year or so (and often less that that) before the organisation is back on the market for a replacement solution – that is, if it is fortunate enough to be awarded more budget! And, if this organisation is a public sector organisation, these costs come from the public purse.

For those less fortunate in getting more budget, they have to endure the pain and cost of supporting a poor solution with all the frustration and embarrassment that comes with explaining to the CIO why the software doesn’t do what it was purchased to do.

So remember, what matters isn’t necessary the price but the ongoing overall cost of ownership of the service desk solution. We want organisations that can put their hand on heart and say they have purchased the right solution that will benefit their organisation long term. It seems the old adage is true – you only get what you pay for.

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