Budgeting Software Cost

Find out the cost of implementing and upgrading to secure, Excel-based budgeting software that makes for a streamlined, collaborative process.

Homegrown, Excel-based budgeting makes perfect sense for the personal or household budget, especially due to the relatively small amount of data, but when budgeting for a growing organization, budgeting software is available to streamline and invite collaboration into the process.  Organization-wide budgeting and forecasting is an important aspect as long-term success of a company depends on its ability to plan and work within their means.

With any company, there are many moving parts with related data required for analysis and planning for the future.  Excel, the tried and true spreadsheet program, is great, but when it comes to security and logistical simplicity of collaboration, it falls short.  However, most budget managers already own Excel licenses, so adding a line item for budgeting software into their current budget might be a big question mark.  This blog will go about demystifying the investment in budgeting software and the potential return on that investment.

 

Budgeting and forecasting software solutions have become increasingly more popular in recent years due to the simplicity, the security, and the ability to empower others to manage their own budgets.  There are several budgeting and forecasting solutions that are Excel add-ins, meaning that the finance team’s beloved Microsoft product is simply accelerated and upgraded for added capabilities while remaining business user friendly.  Much like financial reporting, budgeting software uses accounting and business logic that allows for automation and template reuse.

Furthermore, today’s budgeting software is built with the knowledge that the company budget is made up of more than one department that will require collaboration at some level, but must remain secure.  Without having to e-mail back and forth departmental spreadsheets and then, linking them together to make sense of the company’s big picture budget, budget managers can empower department heads to securely contribute their jurisdictional planning data to the database.  The budget manager can then run a budgeting report through the database, and all the moving parts’ transactional information will fill in to create a complete, consolidated organizational budget.  Sound good?

Of course it does.  Without the bottleneck or the back and forth between company executives and departmental managers trying to formulate a yearly budget or a periodical re-forecast, the process securely invites multiple players into the process, distributing ownership and making the aggravating simpler.  From here, most people then ask themselves, “How much is this going to cost me?” Pricing a budgeting software solution can be broken down in categories: software cost, implementation, annual maintenance and support, and personnel cost.

Software cost can be an upfront cost, which is a direct purchase, or it can be a Software as a Service (SaaS) package, where the buyer essentially rents the software and it is hosted in-house or in the cloud.  Software purchase pricing ranges from $3,000 to $10,000 at the lower end of the market all the way up to a $30,000 – $50,000 range or more at the higher end.  If interested in looking at SaaS solutions, it will typically run from $300 to $500 per month up to $5000 to $6000 a month, depending on the number of users.  In terms of the break-even point for SaaS versus an upfront purchase, it is usually around 36 months, but SaaS often becomes the more expensive solution after that as it relates to software cost.

Implementation typically involves product installation, consulting, and training.  With any new product, installation is standard, and even given how competitive Independent Software Vendors (ISVs) are about making their solution easy to use, consulting and training makes a lot of sense, so that the budgeting software get maximal use and the budget model implementation follows best practices.  In terms of dollars, a very simple budget implementation can cost $5,000.  The more complex, highly configurable enterprise budgeting solutions can be as much as $50,000 for implementation, if not more.  Additionally, maintenance and support are to be expected over the course of use.

Annual maintenance and support are two different things.  Maintenance is for new software updates and any bugs in the software that need to be fixed.  Generally, it is about 18% of the software cost and paid annually.  For SaaS-based software, maintenance is rolled into the monthly SaaS fee, so it is not a separate annual fee.  In terms of support, contracts vary by the ISV, but the cost usually starts at $1,000 per year and goes up from there.  Pricing is often based on the number of users and the original software cost.

Personnel cost refers to the time internal staff spends maintaining and running the purchased budgeting solution.  With a modern, business-user friendly budgeting software, this should be less time and overall cost than maintaining a big, manual Excel spreadsheet model.  Budgeting software takes the typical, cumbersome, home-grown Excel model and makes it simpler by automating the process, most integrating directly with data cubes or data warehouses – or with some products, also integrating live from Enterprise Resource Planning (ERP) systems.  These qualities are the trademark features for budgeting software vendors– and are the value proposition options to weigh when deciding whether or not to purchase a budgeting solution, as well as which one will be best for the organization.

Any company evaluating whether to move from a manual budget process or old legacy solutions to a modern budget software should look at the return on investment (ROI) of the new solution, compared to the amount of “pain” and time spent with the status quo.  Additionally, there are potential hidden costs of a simple Excel budgeting process including frustrated personnel, potential spreadsheet model calculation errors and delayed management decisions due to lengthy bottleneck processes or the delayed budgets.  Comparing that headache with the benefits of a modern, automated and collaborative software can very well make every penny worth it.  A streamlined solution can move the generally dreaded planning process along.

Finally, when looking at budget software, consider that some solutions are positioned as a module within a suite of Business Intelligence (BI) software.  Therefore, whether purchasing other BI modules for enhanced decision-making capabilities, such as financial reporting, dashboards, consolidations, and/or a data warehouse, now or in the future, it might be important to think ahead and go with a module within a suite, so that you can keep your BI tools within the same product line.  Solver offers a budgeting module stand-alone and as part of the comprehensive suite of BI modules and would be happy to answer questions and generally review BI360’s easy-to-use Planning solution for collaborative, streamlined decision-making capabilities.

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