When my wife and I bought our first home, we assumed that the final cost of the home was the price we negotiated with the sellers. What we hadn’t considered were all of the “hidden costs” that come with buying a home: immediate expenses like painting, new furniture, and remodeling, as well as long-term costs like insurance, lawn care, and utilities. So the final cost of the home was actually higher than the initial negotiated sales price.
The same is true when buying a new data management system. When reviewing and comparing costs of a new association management system, we look at direct costs but frequently overlook indirect, unbudgeted, or under-budgeted costs.
Following are the items most commonly overlooked or under-budgeted when considering the total cost of an AMS implementation.
Staff time can be broken out into three categories: project management, testing, and training.
The costs of project management can be significant. At a minimum, one staff person will dedicate 50 percent of his or her time to the project. My most successful clients assign one staff person who is dedicated to the project nearly 100 percent of the time.
Testing can appear costly but is important to prevent higher costs later. Staff needs time to test the system to ensure it is functioning properly and as expected. The most successful implementations will have an established testing schedule and allow staff the time to conduct proper testing.
Training may well be the most important staff-related expense. Let’s face it, when it’s time to trim the budget—any budget—training is one of the first items to go. This is ironic because training is key to the long-term success of any implementation—yet most associations give training very short shrift. To improve your chances of success, budget for more training than you think you’ll need; you’ll probably use it.
With almost any off-the-shelf system, baseline reports are included, often numbering in the hundreds. But at a recent users group, only two of 40 attendees said they were using the baseline reports. All of the others had developed custom reports. Your staff will expect reports designed in a way that is useful to them. Be prepared to spend a lot of time, and a fair amount of money, on custom reports.
At the very least you’ll be integrating your AMS to your website. But are there other systems with which you will need to integrate? I’ve had clients who needed to integrate to outside event registration systems, listservers, third-party exhibit management software, abstract management software, and job banks. Which third-party systems need to be integrated to your AMS?
Unless your association runs in “plain vanilla” mode, even the best off-the-shelf system will require some customization to adapt to your unique business needs. What sort of customizations will be required to meet those needs? Frequently, this is nearly impossible to know until deep into the project. Be sure you’ve budgeted for the unexpected.
Data conversion can be easy—or it can be painful. How many sources of data do you have? Does everything need to be converted, or can you live with leaving most of your legacy data in an archive file for reference? The more disparate sources you need to convert, the more expensive this element will be.
To keep data conversion time and costs down, convert only critical data, and use your legacy system for any “reference” data (e.g., historical payment information).
Post-Implementation Productivity Decline
A decrease in staff productivity is the cost most frequently overlooked. In almost all cases, the efficiency of the staff processing the data will slow down at first as compared to the legacy system. Staff will initially be in “learning mode;” scenarios that hadn’t been tested or considered will pop up; and frustration will likely be higher than usual. Associations need to keep in mind that everyday tasks may take longer than usual immediately after go-live.
To deal with this phenomenon most effectively, acknowledge that a slowdown will occur, and help staff understand that productivity will be lower than typical.
Every off-the-shelf system should have some kind of maintenance plan associated with it. Often the costs of these plans are related to the amount of software purchased. While you may have a line item for maintenance in the original proposal, it is likely that with additional modifications and customizations—and possibly additional licenses—your maintenance fee will rise. Make sure you have a good understanding of how your vendor charges for maintenance.
Like the house my wife and I purchased, the original sticker price on your association management system will not be the final price. Knowing about and preparing for these hidden costs can help you avoid “sticker shock” and ensure that your organization is better prepared for budgeting.
This article originally appeared in the August 2007 issue of Technoscope, published by ASAE & The Center for Association Leadership. Reprinted with permission.
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