On numerous occasions, the first question posed to us by prospective customers is “how much does your system cost”. On one hand, we totally understand the question. Cost is a very important factor!
But should it be the first question asked?
The answer in the great majority of cases is an absolute NO!
As a rule, a mobile time clock vendor should want to get more information about their prospect to make sure they know what the relevant issues are and can provide an appropriate solution. But to keep things simple, let’s assume that the vendor’s software is a good fit for the prospective customer. As a result, they submit a proposal to the prospect.
As part of their due diligence, the prospect has looked at several potential solutions and narrowed the list down to two firms.
At first glance, the choice looks easy. One vendor’s price is twice the other.
Vendor 1 Software Price $ 5,000
Vendor 2 Software Price $10,000
At this point, it is crucial to think a little bit out of the box. Maybe you might ask the question, “why are the prices so different”? It could be that the products are comparable and one company is just trying to make more profit on the sale.
A more likely scenario is that the two applications are not equal from a feature and functionality standpoint.
There are many factors that determine the price of a software product – generally, the more that’s “under the hood”, the higher the price. Adding features and functionality takes time. Adding data integrity takes time. Making the system more flexible takes time. And as we all know, time is money!
The end result of this extra time is an easier to use, more flexible, and more robust system. All this time spent in upfront development makes the software easier to use and enables the user to be more efficient and productive. For example, let’s look at the integration between the accounting software and the mobile time tracking software. Some systems require manual entry of employees, jobs, cost codes, etc. into the time tracking application while others automate that process. We would venture a guess that the savings in time from not having to manually enter source information would be worth a lot to most companies.
Another example might be a company wishing to implement a BYOD policy. By allowing a company to not have to purchase mobile devices for its employees in the field, employing this kind of strategy can produce a substantial savings. But companies with BYOD policies need a mobile time tracking application that can run on just about any mobile device. Often being in remote areas with little or no internet coverage, many of these same companies also need mobile software that can run in disconnected mode as well. All of this flexibility and functionality takes time and resources to develop.
So what is the most important factor to use in selecting a mobile time tracking system?
So, if cost is not the most important factor, then what is? That’s easy – ROI – return on investment. How soon will the expected savings allow you to re-coop your financial investment? From that point on, you should actually be saving money from increases in productivity and efficiency.
Let’s go back to our two vendors, but now, let’s factor in the annual savings that each product will yield. For Vendor 1, let’s assume an annual savings of $2,000. For Vendor 2, let’s assume $5,000. We will also factor in annual maintenance costs of 18% of the software price.
Software Price Annual Savings Annual Maintenance
Vendor 1 $ 5,000 $2,000 $ 900
Vendor 2 10,000 5,000 1,800
The first year results in negative savings for both vendors due to the initial outlay. The accumulated savings after the second year is about equal for both vendors, but after that, the difference really begins to show. Vendor 2 realizes a return on investment sometime in Year 3 whereas Vendor 1 does not do so until Year 4. By the 5th year, the difference is substantial.
When you consider an investment in software, don’t just look at the purchase price. There are two main things to keep in mind: 1) A difference in price between competing products usually results from a difference in features, functionality, and flexibility, and 2) Always consider the return on investment. The less expensive option might provide the best ROI, but there’s a good chance that it won’t!
At mJobTime, we’re very proud of our software. We have developed a mobile time tracking solution that is powerful yet easy to use and very flexible. We know that we are not always the best fit for everyone, but we will be happy to review your situation and assist you in finding the right solution. Our sales professionals are experienced, highly trained, and are interested in helping you succeed. If you succeed, we succeed. Give them a call at 866-922-TIME (8463), email them at [email protected]