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Read That IT Pricing Contract! 7 Crucial Things to Look at Before Signing the Dotted Line

Date Posted - 8th Jan 2014 |  Category - Common IT Headaches, Newsletter

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You’ve probably heard this advice countless times from your parents, friends and trusted advisers… Always read a contract before signing it!

 

This advice holds true for your agency’s IT or software pricing contracts.

 

Small details within that pricing contract can mean the difference in tens of thousands of dollars in annual costs to your agency.

 

So what should you look for? Here are seven (7) different pricing aspects to keep in mind:

 

 

1) What Are the Recurring Costs?

 

Many software licenses have an annual recurring fee after the first year.

 

Typically referred to as “maintenance,” this annual fee can be a small percentage of the first year’s licensing cost (say 20-25%).

 

But other times, the annual maintenance can be just as high as the first year’s.

 

You should also pay attention to the amount that vendors increase their annual maintenance fees. Something in the range of 3-5% annually is fairly standard.

 

Be sure to calculate the ongoing annual costs when you are comparing software vendors since the first year quote may not tell the whole story.

 

 

2) Cost Per What?

 

When you are given a software price quote, make sure you understand if that price is per user, per terminal, per agency, etc.

 

You don’t want to be surprised by a rapidly ballooning pricing agreement simply because you didn’t clearly know the answer to the “Per What?” question.

 

 

3) Are Software Updates Included?

 

Some vendors (like eAgent) include all software updates as part of their standard maintenance agreement.

 

Other vendors charge extra for software updates. Or they require you to purchase “Platinum” service plans.

 

With law enforcement software, updates are to be expected because of ongoing changes to security mandates.

 

So make sure that you understand whether these types of updates are covered.

 

 

4) What Level of Tech Support Do We Need?

 

At some point, your agency is going to require tech support from your software vendor. Your agency will need to determine what level of support will be necessary.

 

Are you purchasing non-critical software where your users can survive overnight outages? If so, then a plan that offers support during normal 9-to-5 business hours is probably fine.

 

Or are you licensing mission-critical software that needs to be operational any time of day? If this is the case, then you will want to have a support plan where you can reach a live tech support agent 24/7.

 

It is important to note that with eAgent, every one of our customers receives live 24/7/365 support as part of our standard maintenance agreement.

 

 

5) What Level of Training Do We Need?

 

Training is a typical area where vendors will pad their price quotes.

 

Such vendors will claim that expensive on-site training is an absolute necessity when in fact off-site or on-line training is more than adequate.

 

You will need to weigh the difficulties faced with learning the new software system and the experience of your agency’s user base to make a judgment call on how thorough the training will need to be.

 

 

6) What Does Every Line Item Represent?

 

In every software system price quote, there will be multiple line items for the entire system.

 

Some of these line items may be poorly defined, or the vendor may use ambiguous jargon that doesn’t make immediate sense.

 

Be sure that you go line item by line item to make sure you understand the reasons for each.

 

Don’t hesitate to ask the vendor direct questions about the necessity of each line item.

 

 

7) Are We Comparing Apples to Apples?

 

When you are acquiring a new software system, you are most likely going to do a comparison analysis among several vendors.

 

As our final piece of advice, make sure that you are comparing price quotes that represent the exact same systems.

 

This comparison can sometimes be difficult to do because of the different ways that software vendors will explain their software packages and pricing agreements.

 

But taking the time to sort out the different pricing agreements will give you a true comparison and won’t leave any ambiguity about the system you will be receiving and the final price to implement that system.

 

 

Stay Safe and Stay Tuned.

 


 

DCI has been providing its line of eAgent software to over 1,600 law enforcement agencies nationwide since 2001. From NCIC access software to advanced authentication, DCI has a solution for all things CJIS-related.

 

We pride ourselves on offering quality software and networking solutions backed by impeccable customer support.