What’s The Big Picture?

Market demand is a dominant force. Cost of a product is actually as high as a buyer is ready to pay. But on the other hand, when sellers establish certain prices it means they have certain business models behind all that. And then resulting cost of a certain product may be settled through negotiations between sides.

Cost of a DMS product depends much on its vendor type. Smaller producers usually come to the market with cheaper solutions, while famous brands tend to add some extra amount to the prices of their owners. On the other hand, big companies often maintain some partner programs allowing their customers to pay less in case they participate.

No wonder that DMS vendors’ pricing will be higher for bigger customer companies that for SMBs. According to experts, the range of a monthly subscription for DMS provider services may vary from $200 to $2,000. In case of a subscription model adoption, it could cost you less if you choose longer payment periods. For example, current top border of yearly DMS subscription for 5 users is somewhere about $3,500.

Let us take a quick glance at modern DMS market in order to get some example. In a recent report by Research and Markets, a well-known research company based in Ireland, the global adoption of DMS solutions by SMEs was explored (these company types make the most flexible and thus more innovative share of the world market). In this paper Microsoft, EMC, IBM and OpenText were named as leaders of this market segment. Other companies which were also mentioned include Alfresco, Hewlett-Packard, Oracle, Xerox, etc. As we can see, MS SharePoint surely enjoys bigger popularity than the open source Alfresco platform despite having significant pricing. The reason is the general popularity of MS solutions among businesses which in our case implies the question of compatibility. (Note: there’s definitely more valuable information in this report but in order to get it you need to buy a copy).

This example shows that the cost of a DMS solution is a complex notion not limited to vendors’ pricing.

Exploring The Structure Of the Actual Cost of a DMS Solution

Of course, cost of a DMS solution has to compensate expenditures of its creation. The more features the product possesses the higher its cost is. But this rule does not always work vice versa. A super expensive product can be backed by powerful marketing campaign while having a moderate functional set.

Another important thing is the nominal number of users allowed for a single DMS license. Typically DMS vendors make some limitations here and come up with different product versions for small, medium and big organizations. It is important to make a right choice having foreseen possible changes in the structure of your company. A solution may seem cheap at first but you may find it not convenient after some time when you appear unable to add another user urgently.

Actual product cost can also be more influenced by the situation in the market than by any inner factors. Let us imagine a DMS solution which is an indisputable leader in some narrow niche – say, data security or speed of documents retrieval. In that case its price is likely to be pretty high as most customers will choose it anyway. On the contrary, a vendor losing the race to its competitors will probably attempt to cut prices temporarily in order to gain stronger positions.

Finally, the adoption of a DMS solution is a multi-stage process which requires much work to be done. That means you should also add the money equivalent of time and resources spent for deployment, your corporate network re-building and staff training. Different DMS solutions can require more or less complex process of adoption, so this factor must be taken into account at the stage of planning.

How Can We Reduce It

No one likes to overpay. Yet choosing cheapest products is not a really good idea as saving money during a short-term period may result in heavy losses in the long term. Paying high price just for getting a top brand solution is not the best way also. Deliberate approach to a DMS solution acquisition means looking only at those solutions which possess the features you really need.

Learning more about your industry peers’ experience is a good idea. Quite probably you have several competitors or companies whose structure and business needs are similar to yours. Try to learn on their errors and understand the reasons of their successes when they adopt DMS solutions. And at the same time don’t forget to investigate your own situation more closely. These two things will help you making plans.

Accurate planning is the best way of avoiding unneeded expenses. Invest more into analyzing your specific business needs and into investigating the DMS market and you will surely save some money in the future. Or, at least, you would have exact knowledge where you made mistakes!