Today's #TipTuesday isn't a technical tip, it's more of a business tip. I've written this to be specific to Dynamics GP, although what I describe may apply to other applications and software licensing. I have not worked with licensing on any other ERP packages to know if this might be a general rule of thumb or not.
For long-time Dynamics GP users, it might be worth revisiting what is registered and paid for, module/functionality-wise. It's probably worth taking a look at this every few years post-implementation, particularly if the organization paid for things up-front with the intention of phased implementations later. Every year is probably too frequent, but every couple of years allows time to evaluate if the organization's master plans have changed, and if it still plans to implement what it thought it would at the time of purchase.
The math works out that, on average, every 5 years each software module is being re-purchased (based on a rough average of 20% annual enhancement from ISVs). This doesn't apply to subscription-based licensing, which is paid by the month, but the vast majority of users of Dynamics GP are not on subscription licensing (or that would be my guess).
Look for the value
When I first started my business, one of my main focuses was helping customers evaluate what they have purchased, to help clients get even more value out of their investment. I still think that same way, 10 years later. I hate seeing a client who paid for something they aren't using. If an organization is in this situation and continues to pay annual enhancement year after year but doesn't plan to implement something, ask why. Remember the 5-year rule above.
I recently went through this with a client and we shaved quite a chunk of software off their annual enhancement costs. They had modules that were purchased during the original implementation that were no longer in the plans to implement. Businesses change, personnel changes and it's quite possible that whatever the vision was during the original sales cycle has changed. It's one thing to pay for something that was never used, but it's quite another to continue paying for it year after year when at some point the organization could cut its losses. (It is a sunk cost, but the organization should get some relief in operating costs annually if de-registering things they don't intend to implement).
Important caveat: once a product is removed from the organization's "price list", if someone changes their mind, they would have to re-purchase the module at the current pricing. Annual enhancement on the majority of ISV products & Microsoft's core Dynamics GP is based on a % of the list price at the time of purchase. Chances are the pricing has changed since it was purchased so be sure before removing it.
Another important caveat: if some of the purchased software is installed, even if it's not "used", engage the partner to assist in uninstalling and removing the references to those modules or products. Make sure this is done properly otherwise, it could impact a future upgrade.
Where should I start?
I would look at the original purchase, and make a list of the things that were purchased at that time. I would look at annual enhancement invoices. If those invoices are in detail, someone should be able to trace through what the organization is paying for each year. If the software was purchased and registered at the time of the sale, it would generally trigger an annual enhancement invoice so if there is a purchase but no corresponding credit or annual cost, ask the partner about it.
Generally speaking, annual enhancement invoices for most ISV and Microsoft Dynamics GP modules should be the same year after year unless the organization has continued to purchase more user licenses or added other ISV products or GP modules. There can also be foreign currency swings depending on the organization's currency and the currency of the ISV products in use, which might account for some variation. Generally, one should see the same things on the list year after year. (Edit in 2023: it is now becoming more commonplace that ISVs are increasing their enhancement list price and I would say it is no longer "rare" that the enhancement price stays the same forever).
With some larger ISV suites of products, more information may be required than a typical enhancement invoice may provide and the partner can provide that. Take Key2Act as an example, most people who have some of their products will have multiple pieces in the suite of products they offer but might only see a one-liner on an invoice for their enhancement. If the annual enhancement invoice just lists ISV names, ask for more detail, to break it out.
It never hurts to ask for the details: get a list of the specific modules the organization is paying for annually. If no one knows what they are for or what they do, talk to the partner. Lots of modules have odd names that don't make it easy to identify exactly what it's for, so ask those questions or have them demonstrate what the functionality is.
There will be things on the enhancement list that might not be possible to remove, due to how it's licensed or possibly some interactivity with another module that is in use. For example: for those on Business Ready licensing or newer with the core Microsoft software, an organization can't "remove" SOP, POP, or Inventory example just because they don't use it. The core product is licensed per user, not per module. That is a fairly simple example but the reality is, these are conversations to have with the partner/VAR.
Talk to the partner/VAR
The repeating message here is to talk to the partner/VAR. They should know the implementation details to have that conversation with the organization and it's in their best interests too, to see that their client is getting the most value they can out of their investment. If there are things that may not be used, rely on their expertise to help evaluate or confirm that before making a decision. If there are things an organization can implement, they are also going to be interested in seeing how they can assist them in successfully doing that!
