Written by our Account Manager, Paul Durbin

When looking to purchase software – or indeed most things – your return on investment (“ROI”) is a critical calculation to make. 

A new AAA console game for £60 isn’t cheap, but if it gives you over 100 hours of entertainment, at 60p an hour – many would say it’s not a bad price. If it’s a shorter game, the price per hour goes up, but perhaps it’s MORE fun (Were it possible to measure fun) – so you can re-assess and still consider if it’s worth you spending your money. 

For clothing - leaving aside the perceived value of designer/high-street - do you pay a premium for something more durable if it will give you x-more years worth of wear, or slightly better waterproofing, more breathable, more ethical… 

For the buyer, it simply comes down to “is it worth it?”. And a things’ worth is inherently linked to its value. 

If we move away from “fun” things, to “useful” things, and return our focus back to software, they tend to fall into two types; products that do something you can’t do without specific software (I’d wager very few photographers are using MS Paint), and those that do something you can do in other programs (looking at you Excel), but do it better. 

The first category are relatively easy to evaluate – how much do you value being able to do what the product offers? Competition likely exists, but you know you’ll have to spend something, you just need to decide between which system you want. 

For the second category, it’s slightly trickier. Over my 9 years at Artifax, I’ve encountered Excel (often alongside Outlook) being used for a LOT of things; to manage spaces, rota staff, track holidays, manage maintenance requirements, log festival submissions, and several other tasks as well.  

Sure, it kind of works, but it’s not what Excel is designed for.  

So now you’re not just asking “how much do I want to pay to do this task?”, you’re asking “how much better is it than what I’m currently using, and am already paying for?”. 

To help you answer this question, you can do a simple cost/time analysis. 

When we’re speaking to prospects, we offer them an “ROI Calculator”, which simply asks them how long they spend doing regular admin tasks each week. We can then directly compare this with how long it would take them using ArtifaxEvent or ArtifaxAgora. You are then presented with a very simple comparison; using ArtifaxEvent will save you this many hours every year, compared to the current situation. 

You can then take your average hourly salary of the people completing these tasks, and see what your ROI will be; “We will be spending X-amount on this software, but it will be saving us Y-amount of our staffs time”, so Staff Time Costs – Software Cost = ROI.  
 

This can also be helpful when comparing competing products. Each may have unique features and are unlikely to cost the same – so again, you can see that whilst System A is cheaper than System B, System B offers you more time savings each year. 

Important to note, this isn’t looking to replace staff with software – it’s freeing up your staffs’ time so they can focus on the human-centric parts of their job, rather than spending time doing repetitive admin tasks.

Software can’t negotiate a contract, but it should be able to produce that contract at the click of a button.

Software can’t upsell a customer on to the higher delegate package, but it should produce a weekly sales pipeline report to your Head of Sales.

Much like with Excel, you’re paying for your staff already, so it’s best to use them for what only they can do.

Other considerations

So this covers using the software – the functional requirements – but what about non-functional requirements?
A products’ value is a lot more than just what it does. Some other areas to consider:

Data Security

Are they ISO27001 certified, do they have Cyber Essentials certification?

This is a harder thing to value – how much extra are you willing to pay to a company that treats your data as securely as if it where their own?
Or, more dramatically, how much would it cost you if you lost all your data? Or had to roll-back to a week as backups were taken weekly, rather than daily (or 4-times daily in our case…)
Passing and retaining these certifications takes time, and so costs more, but should provide you with confidence your data is secure.

Support and Services

Two competitors, all other things are equal, but one supplier charges you £500 p/a more for 24-7 support. If you call it once in three years, that’s a £1,500 support call, which maybe could have waited until the morning?

Speaking from Artifax’s perspective, we have over 14,000 users of our product, and have never been required to answer a support ticket outside of core hours. Our cloud-hosted environment alerts us instantly of any issues, so we’re able to action this without the need for a user to call us.

Are you happy to pay a bit more to be able to call someone, or are you happy with email support only?

For training and implementation, does it matter if your trainers are in the same country if everything is remote?

Industry Knowledge

Newcomers are often cheaper as they try and disrupt the market, whilst more established companies may charge more as their experience of the market itself carries value.

You shouldn’t have to explain how your industry works, as stalwarts will already know – and can advise you on best-practise. Alongside the software, this also extends to a suppliers’ staff; do they have experience doing what you do? Are they Prince2 certified, ensuring your implementation project is well run?

Summary

Some of the above is hypothetical, and many don’t have a right answer or the answer will vary by buyer, but they are hopefully a useful starting point when trying to determine a products value in relation to its cost.

When a company tells you something about their product – just consider the simple question, “What is the value of this to me?”