Software Pricing Questions	Rating
Neville Turbit - Project Perfect
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Overview

Software pricing can be a mystery. Those of us, who have purchased software, or hardware for that matter, usually have some horror stories of hidden pricing elements.

ERP Pricing

Here are a few questions to ask about the price:

Initial Price

• Software base license fee
• Cost per seat (Named or concurrent users. Named means every person using the software has to pay a seat fee. Concurrent means you pay for a certain number of people to use the system at any one time)
• Loadings for company size
• Per processor fees
• Delivery charge.
• Deposit required
• Fees for web version (Are there additional fees for web access versions)
• Fees for other devices (e.g. Interface through palms)
• Other required software (What else do you need to run the application)
• Copyright fees (If the software uses another organisation's copyright)
• Warranty charges (Separate charge for an extended warranty period)
• Insurance against lack of performance or installation schedule not being met
• Statutory and Legal charges
• Tax (In this country, or in the country of origin)
• Escrow charges (charges to hold a version of the source in escrow)
• Discounts available (e.g. discount for x user license)
• Multi-site discounts
• Currency quoted
• Exchange rate calculation basis (Rate and fluctuation allowed for in the price quoted). This applies both to the initial quote and future payments.
• Defect rectification costs (should be nil)
• Date of the quote expiry
• Any additional commission or agency fee charges

Hardware Pricing

• Hardware costs
• Hardware setup costs
• Hardware installation
• Hardware delivery
• Network establishment/upgrade
• Disk storage upgrade

Other required software

• Operating system costs
• Database management system
• Data communication costs
• Report writers

Implementation Pricing

• Staff training (Generic and custom training)
• Manuals (What types, and their cost)
• Implementation costs (To install on our system)
• Configuration costs
• Customisation costs
• Data Conversion and cleansing
• Testing costs

Support Pricing

• Help desk charge basis (charge per call, access fees, dial up charges)
• Ability and cost of reducing level of support (Help is likely to taper off after the initial period)
• Remote help desk charges (line installation, modem etc.)
• On-site support charges
• Accommodation and living costs for on-site support
• Remote support charges

Maintenance Pricing

• Maintenance charges
• Maintenance scales (e.g. 1 hr response v 24 hr response)
• Basis for maintenance calculation. For example if it is a percentage, what is it a percentage of? Is it the list price? Is it the purchase price? What is the basis for next year?
• Limit on increases in annual maintenance charges

Ongoing fees

• Usage fees
• Transaction fees
• Payment schedule (When are payments to be made)
• Unpaid amounts interest rate. When do these start?
• Additional licenses
• License relocation
• Annual use of consumables

Upgrades

• Upgrade fees for next release
• Mandatory upgrade costs
• Upgrade implementation costs Conversion costs
• Other software upgrades required

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