Workplace Technology Assessment
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By Katherine Schwartz
Demand Generation Specialist
Companies need to consider software investments carefully. There’s a lot riding on a decision like facility management software, since so many of the company’s processes and automations will tie into it. Don’t forget about monetary investment, either! Between purchase and subscription costs, as well as the investment in peripheral technologies, companies end up spending no small amount on technologies that help them optimize facility investments. It begs the question: how much does facility management software cost?
Like most investments your business will make, FM software price is on a sliding scale. There are certainly low-cost options to consider, but they’re likely to lack features. Likewise, there’s a bounty of feature-rich software out there, provided your business can justify a higher cost. For most businesses, the answer is somewhere in-between. To figure out how much facility management software will cost you, it’s worth determining the scale.
Highs and lows on the cost scale
Facility management pricing comes down to mix/max estimates for different software platforms. As a general ballpark for scale, you can estimate $3,000 as the absolute minimum and about $50,000 as the maximum, which will put most software investments somewhere in-between—likely just about the midpoint, at $29,000.
This scale isn’t gospel—it’s merely meant to set the expectation for facility managers. For example, if you manage simple facilities for a small company, you know you’ll likely fall to the lower end of the scale. If you’re an enterprise customer with broad demands, you can estimate higher on the scale. This also contextualizes prospective software. If a certain quote or company comes in substantially higher or lower than competitors, they’re either worth investigating more or not worth your time as an outlier.
Consider cost structure and fees
Once you’ve established a scale of facilities management costs, consider how those costs break down. Are you paying $20,000 outright to own a piece of enterprise software? Or $49 per month, per user to license it? Are there fees for certain features or tiers for additional users or workstations? Look past the initial price tag at the total cost of ownership into the future. Smart facility managers will map out these costs incrementally: cost to purchase, one-year cost of ownership, five-year cost of ownership, and break-even point.
There is no right or wrong answer for which fee structure is best for your company. What matters is how the total cost of ownership stacks up against similar programs and the value you get for that cost. It might also behoove your company to look at the cost burden. Is it worth it to pay a flat $20,000 out of pocket right now or $500 each month in user licenses and features? Your decision may dictate the options available to you.
Find a balance of features vs. price
Cost vs. benefit is part of every business transaction, and an investment in facility management software is no different. What do you get for your money? At a bare minimum, the features of the software you choose need to meet your basic facility management needs.
- First, do a 1:1 matchup of need to features. If there are five core goals driving this software purchase and the software meets them all, ask yourself if the price is worth it. If there are five goals and the software meets three of them, you might be less inclined to make the investment.
- Second, look at opportunities for improvement. Software with robust integration capabilities might entice you more than those without, and you might be willing to spend more for this convenience. It might even result in better ROI if you can leverage this benefit into broader improvements.
- Finally, consider the efficacy of the features. Are these cutting-edge tools or resources that are quickly becoming obsolete? Is this company rolling out new resources included with your subscription or purchase? Look beyond the individual resources, to what the software offers as a whole, and at what cost.
It comes down to return on investment (ROI). If the software costs $10,000 and will help you generate $2,000 in annual facility management savings, it’ll take five years to generate a return. Is that worth $10,000 today? More? Less? Crunch the numbers and do what makes sense for your company.
Make an investment, not a purchase
Above all, don’t look at FM software as another purchase—frame it in terms of an investment. Calculate ROI and your break-even point to justify cost. The core reason for an investment in facility management software is to generate cost savings. If the price of your software negates those savings, it might not be worth it. On the other hand, the cost to unlock new capabilities, savings, and opportunities may be well-worth the price. It’s up to every company to calculate.
Keep reading: Why is Facility Management Important for Productivity?