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Buyer Beware: The Hidden Costs of Free Software

Free software may be worth less than it costs

When it comes to purchasing new software, many organizations do so to increase efficiency, save time and reduce costs. This is particularly true of small government agencies, which often have limited staff, busy schedules and modest budgets.

Enter “free” software: on its surface, a simple, cost-effective solution. However, free software isn’t always free, and government operations often learn this the hard way: after incurring costs from implementation, consultants, ancillary features, support, and ongoing maintenance. These costs add up to more than a solution with an upfront cost but long-term savings.

Below are pitfalls to avoid and tips to help you select something that will be a better fit for you, your agency, and your budget over the long haul.

The Misleading Sales Pitch

Low purchase prices and robust “communities” of users tempt government video facilities to invest in these free solutions. However, the “free” program is typically a bare-bones solution, containing only limited functionality. The software company’s sales staff exalts the limitations as a selling point, telling potential clients that their software is highly customizable. Although this is true, this customization is one of the factors that contributes to the overall cost.

If You Can’t Implement the Software, It Will Cost You in the Long Run

Gretchen Barry

Consultant fees for implementing software can quickly negate any initial cost savings. Why? Transforming the basic software into a usable solution for your organization typically requires consultants. Most small government agencies do not have IT personnel on staff, which means that they are completely dependent on these consultants or parent organization’s IT staff to implement the software.Many larger government IT operations flat-out will not permit such programs without extensive testing to ensure they work properly and do not impact system security, and that takes manpower and money.

More complex features increase implementation cost. Consultants work on an hourly basis, often charging up to $150 per hour. And once the system is up and running, the staff needs to learn how to use it. There is often limited documentation on these low-cost products, and the trainers to help also cost additional money.

What does this say about a system that is so difficult to understand that it requires consultants or your IT department to manage? In the end, a small government facility could have paid a higher up-front fee for an all-inclusive software solution and greatly lowered its costs.

How to Find a Comprehensive and Cost-Effective Solution

Organizations should look for all-in-one software solutions which don’t require external staff to set up or maintain. All-inclusive CRM solutions will provide many of the above costs in their total pricing. That means that budgeted operations know exactly what their up-front and ongoing costs will be.

Ask providers the following:

• How many of their clients require consultants or trainers during implementation.

• The price per hour for any consultants.

• The average cost of total implementation for most of their clients. 

• A detailed price breakdown of:

 – purchase price for the software

 – installation and implementation costs

 – customization options

 – migration of your data from the old to new system

 – ongoing monthly fees

 – staff training

 – ongoing product support

Research Now, Save Later

Although it can be tempting to “save now and pay later,” it is worth your time, now, to do your homework, test drive software, and calculate the full cost of “free” and paid software solutions. Free often comes at a higher cost in the long run.

Gretchen Barry is the director of marketing for NonProfitEasy.