Thursday, December 15, 2016

Nine Costs to Remember when procuring CRM Systems

On the ninth day of Christmas, my truelove gave to me... Nine Costs to Remember when procuring CRM Systems

There are many costs which you need to take into account when procuring and then implementing a new CRM System or Fundraising Database. The following are the core costs:
  • Software Licenses: Regardless of the type of license - perpetual vs monthly/annual (subscription) licenses, and concurrent vs named vs unlimited user numbers - you need to make sure you are comparing like-for-like across all your potential options, including any 'core module', additional modules/apps etc. (And that's before you consider and compare actual functionality and benefits.)
  • Hosting/Storage: This can be different depending on whether you are looking at cloud or on-premise or third-party hosting. It is comparatively simple to cost at an "explicit" level but can be very difficult when looking more deeply. At a simple level, Cloud systems will probably include x Gb of storage with your standard price and then you pay extra for every additional Gb you need. Bear in mind that can add up, especially for larger databases. You will therefore need to work with potential CRM suppliers to calculate how much storage you will need - and then add more to allow for future growth. That can be difficult. With on-premise solutions, the explicit cost is of course the hardware and associated software - but the harder costs are the fact that your internal IT staff will need to maintain that hardware, do upgrades etc, which is why Cloud salespeople say Cloud is so much cheaper. And for on-premise, you should probably also allow for the cost of new servers every n years, depending on your organisation's policy.
  • Internal Project Team: Except for small database implementations, you will almost certainly need specific costs for an internal project team, back-filling etc. (See Christmas Tip #6 for a few more thoughts on this). Such costs could vary depending on the type of software or supplier you select.
  • Supplier Professional Services. This has the potential to be a wide range of costs - and one of the highest budgets. For example: consultancy, system design, development and customisation, creating blueprints, report writing, installation, support with UAT, post-live support, project management etc etc. Read another blog post of mine about how you can compare suppliers' professional services costs and what to look out for.
  • Data migration: I have separated these from the rest of the Supplier Professional Services because, for any database larger than a simple spreadsheet, they can be harder to cost up-front, until a supplier has had the chance to look at your existing database in detail. For larger projects, this won't come cheap - do not under-estimate.
  • Training costs: whether it is internal, using a third-party/contract trainer or using the supplier's staff.
  • Integration: If your project involves integration of any sort (and it almost certainly will if it is for fundraising), from receiving online donations on your own website or data from JustGiving, through to importing data from fulfilment houses and exporting to finance systems - and more - then these costs can start to add up. I have written several posts specifically about integration over the years. Bear in mind 'integration' can mean different things to different people and to different suppliers so be careful when comparing costs and approaches. Talk to all suppliers in detail to clarify any uncertainties.
  • Annual (on-going) Costs: Software Support/Maintenance - Most traditional fundraising package suppliers charge x% per year for software support/maintenance but that often includes future upgrades too. With CRM systems, the business partners you implement the software with will also likely charge annual support costs which will vary depending on whether they are selling a 'template' solution, developing from 'vanilla' etc. And Software licenses - if you are paying on a monthly/annual basis then you will of course continue to pay such costs every year. To compare, annualise them and compare over n years.
  • Other Costs: Okay, I know this category could include anything but that's the point! I do also want to emphasise that there are any number of other, additional potential costs in a fundraising or CRM implementation, from hardware and workstations, to PAF and banking validation software, other people costs, paying fulfilment houses and other suppliers to change file formats and so on and so on. Find what you need and build them in to your final budget.

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