Factors that determine software costs and make comparison difficult

Blog  — Mon 8 May 2023

While everyone often has their own area of expertise, we also all share one "language": money. But in addition to hearing a price, it is also important to understand that cost. This can be done, for example, by asking for an explanation, by requesting an itemized quote or even by partially immersing yourself in other people's areas of expertise. Even if only on the surface.

Why comparing offerings in the IT industry is so difficult: the complexity of software and the ecosystem around it.

The IT industry has a major disadvantage when it comes to understanding and comparing offers. Offers on products from other industries are sometimes relatively easy to fathom, such as a plastic garden chair. For example, it may or may not have a compartment for magazines, and seat cushions may or may not be included. This makes it relatively easy to compare one offer to another. In the IT industry, this is often not the case.

Software does not have just a handful of variations, like the garden chair mentioned earlier. With software, there are easily tens to hundreds of thousands of differences. Most differences are in the software itself, its ecosystem or its security, while others are on the proverbial "outside," such as service level, workmanship and overall quality, for example.

Notable differences in selecting software offerings

Most of these differences go unnoticed by the untrained eye during the offering phase, such as what happens when a user or abuser does something that is not intended. It is also important to pay attention to how ready the software is for future growth and updates, and whether it is suitable for use by consumers on different devices with different settings.

In addition, software companies often offer different modes of operation, even within the same company. For example, you may ask for the most direct route to your solution, or you may specify that you want to use more comprehensive practices. An example of such a more elaborate workflow might be to use a separate test environment for your software, or to ensure that every change is properly recorded and documented. These types of capabilities can help ensure the smooth and reliable operation of your software solution. Therefore, always ask about the methods offered and choose the one that best suits your needs.

The challenges of comparing and practicing ICT in a rapidly changing industry

Another special feature of the IT industry is that an offer from last week can quickly become obsolete, so to speak. In fact, there is daily innovation and improvement in this industry, which also makes comparing offers in long-drawn-out processes very difficult. That same innovation and improvement also makes it a difficult profession to practice. Every day the expert must spend time to remain an expert. Information security in particular contributes to this, but so do rapidly changing consumer electronics, both hardware and software.

The cost of software, custom made or not, is therefore primarily determined by a rapidly changing and still rapidly developing industry. The undiminished duty of care of entrepreneurs in this industry, new rules and legislation, and the continuous learning and unlearning have an undeniable effect on the price of software.

Collaborate with software vendors to understand and control software costs

Understanding the cost of software is challenging, but it is essential to making informed decisions when choosing the right software for your business. By understanding the factors that contribute to the cost of software, you can better determine which solution best fits your budget and business needs. It is important to remember that the IT industry is a rapidly changing and complex one, and that ongoing maintenance and staying up-to-date are also essential to keeping your business running smoothly.

By partnering with experienced software vendors who educate you on the content of the offerings and the rationale behind those decisions, you can learn to understand and control the cost of software in order to lead your business to success.