IWMS expert and Lucernex President, Joe Valeri (see Joe’s management summary here), discusses use of third party software licenses in IWMS.
So here is one of the dirty little secrets of all software vendors including almost all IWMS vendors. Has this happened to you? Your company begins a product selection and ask for preliminary pricing from vendors to make sure they are in the ballpark. They provide informal pricing. You pick your finalists and send out the RFP. When you look at the pricing provided in the RFP you notice the pricing they provided is shown but there is also a list of required third party licenses; often not including the prices of those licenses (which probably makes you think they are negligible).
You finalize you process and select a first place vendor and ask for final pricing. They provide it including an appendix, at the end of the document, with third party licenses that usually includes a reporting tool like Business Objects or Cognos, a Work Flow tool, a document redlining tool and a few other apparently necessary applications. When you add up the cost of those applications it may exceed the cost of the IWMS application itself!
This should raise several red flags not the least of which is your cost estimates were WAY off. It should also tell you how much of “their” IWMS product is not actually theirs. Third party tools while often included in the installation package are NOT native applications and can not possibly be as deeply integrated as native applications (those built by the IWMS vendor on a single platform).
So what is the problem with third party applications?
In the short term the most obvious issue is the substantial additional cost of the IWMS solution. Longer term, the cost and stress of maintaining those licenses is a headache and, if the IWMS vendor maintains them and bills you, you will be forced through changes in functionality that neither you nor the IWMS vendor has control over. Third party vendors also raise their prices over time so your long term cost is not guaranteed. Sometimes IWMS vendors have to switch third party vendors as they change their applications which means you have to retrain people not only on the IWMS application but the integrated third party application as well.
Why do IWMS vendors use so many third party applications?
Third party applications cut R&D cost and allow the IWMS vendor to focus on core real estate and facilities functionality that are most important to clients. Sometimes third party applications can not be avoided as they are so specialized no IWMS vendor could possibly replicate them in any reasonable period of time. For example, all IWMS vendors that I know of use a third party document redlining tool. Sometimes, however, applications like reporting and work flow are simply to expensive for IWMS vendors to produce and they “punt” by buying a third party app.
What can you do?
Make sure to ask up front, when getting preliminary pricing, how many third party applications are required and what is the exact cost. Ask why third arty applications are required and if there is an alternative? Ask the vendor if they are getting a mark-up on the third party application? Ask the IWMS vendor who will support the third party application?
Once you have all of those questions answered you can make an informed decision on whether the IWMS product capabilities outweigh the drawbacks of the third party applications.
Shameless Plug
Lx IWMS and Lx Contracts are built on a single platform with a single database, which includes natively developed ad-hoc reporting, dashboards and work flow. Since these applications were developed by us, on our platform, they are deeply integrated across the entire lifecycle in a highly consistent manner. A third party application is required for document redlining and viewing BUT the cost of that application is included in the price of the IWMS. We have NO third-party application costs and, in fact, have no other third party licenses required.
Previous IWMS related Blogs
What is IWMS anyway?
IWMS? It’s Location! Location! Location!
The Power of Location Management
IWMS – Why so expensive?
IWMS in the “Cloud”
How Capital Project Management fits in an IWMS
What makes one IWMS easier to implement than another?