ONGOING FEES ARE AN ISSUE
June 29th, 2010 | fastener software | No Comments »
Software companies have many ways that they make money. The vast majority of software companies receive more than half of their revenue from “ancillary services”.
My definition of ancillary services is:
Ancillary services are services that you are billed for that were never directly stated in a contract. In effect, they are surprise billings. They can easily add up to 2 to 4 times the price of the original quote. They are a big deal.
There are many names for the services provided; installation charges, implementation fees, training, contouring, consulting, custom programming, etc. The one thing that all these fees have in common is that the client usually is not in a position to determine whether or not they are actually needed or whether they are actually taking as long as stated.
The Fastener Industry has many quirks and special needs that are not often addressed by general distribution software. There is often a big disconnect when it comes to the question of whether or not the system should have had these capabilities “out of the box”. The vendor usually insists that they had no obligation to supply these features or services and the client can’t run their business properly without them.
In the end, it almost always works out that the client pays.
It is very important that you trust the company that you are buying software from. Not all software companies are completely honorable and no software company has 100% competent people. When you are checking references, spend time discussing this subject. Even clients who are now happy with their software can tell you horror stories about the original budgeted amount vs. the actual installed price of the system.