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The price you pay for your AMS comes down to functionality

There are hundreds of products on the market today that bill themselves as assn management software systems. So, why are there such significant price discrepancies among these packages? More often than not, it comes down to functionality.

Of course, there are other factors that affect the price of any software package: The technology used (open-source vs. proprietary), the size of the company, and even how motivated the company is to make a sale.

When comparing a higher-priced AMS package to a lower-cost one, there are a few areas in particular that distinguish them. Knowing these differences can help you and your organization decide between buying an AMS “on the cheap” or investing in a more expensive, but likely more robust, software system.

While these are generalizations, and some lower-cost AMS packages might have portions of the functionality included in higher-priced systems, generally speaking, the higher the price, the more functionality.

Pricing Schemes
Higher-cost AMS systems tend to be much more flexible than their lower-cost counterparts. One example is the ability to have different pricing schemes for different members. Most lower-cost AMS systems offer member and nonmember pricing, but do not offer variations within a membership category. For example, your organization might have different membership tiers based on length of time in the profession, budget or staff size, or for-profit vs. nonprofit. Many lower-cost AMS systems cannot easily make these distinctions.

Another example is pricing tiers for events and products. For lower-cost AMS systems, pricing tends to be driven by member and non-member only. In higher-priced systems, pricing can be much more “granular” and targeted. Membership types could drive pricing (for-profit vs. government entities or representatives).

Typically, the higher-cost AMS systems have more robust accounting functionality. A good AMS should serve as your organization’s accounts receivable system, allowing you to track how much has been invoiced to, or is owed by, every individual or organization doing business with you. The lower-cost systems tend to track financial transactions in an elementary manner, typically without integrating those transactions to the general ledger or providing a tight financial audit trail for cancellations, refunds, reverses and write-offs.

Adding Fields
The ability to add fields to your database should be a prerequisite for any system your organization considers. However, lower-cost systems tend to be more restrictive than higher-cost products in this type of functionality.

Higher-priced systems usually allow an administrative user the ability (with proper training) to add fields to any (if not all) areas of the database, without direct vendor assistance. Lower-priced systems usually have a limit on the number and type of fields that can be added, and often require intervention from the vendor (which might require additional expenditures).

Getting the data out of your database is as critical as putting it in. The higher-cost AMS products tend to have stronger reporting features than the lower-cost systems. Most higher-cost systems add a third-party report-writing product (e.g., Business Objects Crystal Reports) which adds to the cost of the system, but also provides much greater flexibility and functionality. Lower-cost systems tend to rely on reporting tools native to the database software which, by their nature, are less functional than something like Crystal Reports.

When considering an AMS for your organization, start by taking a hard look at how much functionality you really need. If your business rules cannot be accommodated by a lower-cost, off-the-shelf system, ask yourself why. Is it really necessary that your membership has 22 different dues levels, or is it time to consider a more generic dues structure?

Seriously reviewing your organization’s operating procedures and updating them to be more in line with a standard, non-customized system will save you from considerable or wasteful investments in time, money and staff resources.

On the other hand, if your assn is anchored in atypical processes, the investment in a more flexible system is well worth it. Trying to make a system function in a way it was never intended to, will cause more trouble in the long-run than whatever you save upfront.

This article originally appeared in the Dec. 23, 2005 issue of Association Trends. Reprinted with permission.


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