How Much Does Construction Software Cost?

Generally, there is a clear need for a tool; the tool has a set price; and the decision to invest or not invest is relatively straightforward.  However, this is simply not the case with software.

Why is that?  Often times a company looks for a price for software without understanding the full spectrum of benefits and the true value the software has to its owner(s), managers, office personnel and field staff.  I strongly believe the main reason most salespeople struggle with providing a price is because they are not good at determining the value to a contractor.

This article explores that value and how it relates to construction software cost.

Asking Yourself the Right Questions

Here are just a few of the questions companies should be thinking about when doing a cost-benefit analysis of construction software.

How much is it worth to cut the time of a critical process in half? Or, catch a change order that may have been missed? Or not be able to make quick and accurate decisions while projects are in crucial stages?

Is duplicate data entry part of your process?

How is the work involved in using Excel for reporting or tracking important information more valuable than having automated information that is integrated, fast & accurate?

What about all the time it takes to put together the right reports, contracts & forms?

Everyone’s time is worth something.

Determining the Software Price

Once it is determined what your company’s software needs are and the value has been recognized, the pricing piece is simple.

First, how many concurrent users do you need and which modules are required? Then, add the annual updates and unlimited phone support (usually about 20% of the software cost) and this gives you the total software price, including the 1st year program enhancements, tax updates and unlimited phone support.

Generally, all software systems are priced this way and salespeople can come up with a price fairly easily.

Estimating Implementation Cost

The more difficult task is coming up with an accurate software implementation cost to get the system up and running.

Most companies will need to budget for electronic data conversion of vendors, customers, employees. Electronic data conversions are easy to price because it doesn’t matter if you have 50 or 500 vendors, the time required is essentially the same.

The software training budget is by far the hardest to pin point. This will depend on a few key variables. Mainly, the level of knowledge & experience the main users have along with the complexity of the business requirements. Obviously, implementing certain integrated modules like estimating, service management, field operations or going paperless requires more time.

An implementation budget can be accurately estimated after a complete needs assessment has been done. As a general rule, 90% of our customers investing $2,500-$5,000 in implementation services get completely up and running.

In my years helping contractors migrate to a Sage software system, most spend between $5,000-$7,000 for a 1-2 concurrent user system and closer to $15,000 for a 4-6 concurrent user system (depending on the modules needed, this pricing includes the annual updates/support and consulting).

Outgrown QuickBooks?

If you are outgrowing your solution, struggling to get  enough out of something off the shelf and generic like Quickbooks, or you have an older legacy system that has run its course, have someone help assess your needs to determine if a construction management solution provides enough value to your company. From there, it will be easy to formulate a ROI and the value construction software will bring to staff, management, owners and field personnel.