Are you using what you've purchased?

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.

If you’ve been using Dynamics GP for any length of time, it might be worth revisiting what you’re registered for and have paid for, module/functionality-wise. It’s probably worth taking a look at this every couple of years post-implementation, particularly if you paid for things up-front with the intention of phased implementations later. Every year is probably too frequent, but every couple of years allows you time to evaluate if your master plans have changed, if you still plan to implement what you thought you would at the time of purchase.

The math works out that, on average, every 5 years you are re-purchasing your Dynamics GP software (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 you are in this situation, and continue to pay annual enhancement year after year but don’t plan to implement, ask yourself why you’re holding on to it at all. 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 you’ve never used, but it’s quite another to continue paying for it year after year when you could cut your losses. (You won’t get your purchase price back, that’s a sunk cost, but you will get some relief in operating costs annually if you de-register things you don’t intend to implement).

Important caveat: if you remove a product from your price list and change your mind, you 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 your list price at the time of purchase. Chances are the pricing has changed since you purchased it so you want to be sure you don’t need it before removing it.

Another important caveat: if some of the purchased software is installed, even if it’s not “used”, you may need to engage your partner to assist in uninstalling and removing the references to those modules or products. You’ll want to ensure this is done properly otherwise it could impact a future upgrade.

Where should I start?

I would look at your original purchase, and make a list if you don’t already have one of all of the things you purchased at that time. I would look at your annual enhancement invoices. If those invoices are in detail, you should be able to trace through what you are paying for each year, which would typically be the same list of software you identified in your original invoice history search. If purchased software was registered at the time of your sale, it would generally trigger an annual enhancement invoice so if you see a purchase but no corresponding credit or annual cost, ask your partner about it.

Generally speaking, your annual enhancement invoices for most ISV and Microsoft Dynamics GP modules should be the same year after year unless you have continued to purchase more user licenses or added other ISV products or GP modules. There can also be foreign currency swings depending on where you are and what the currency is on the ISV products you use, which might account for some variation. Generally though you would see the same things on the list year after year and you have an inventory of things to evaluate.

With some larger ISV suites of products, you may need more info that your typical enhancement invoice may provide and your partner can give you that. Take Key2Act as an example, most people that have some of their products will have multiple pieces in the suite of products they offer yet you might only see a one-liner on your invoices for their enhancement. If your annual enhancement invoice just lists ISV names, ask for more detail, if you don’t have it on another original contract somewhere to break it out.

It never hurts to ask for the details - get a list of the specific modules you are paying for annually. If you don’t know what they are for or what they do, talk to your partner. Lots of modules have funny names that don’t make it easy to identify exactly what it’s for, so ask those questions or have them show you what the functionality is.

There will be things you have on your price list that you might not be able to remove, due to how it’s licensed or possibly some interactivity with another module that you do use. For example: if you’re on Business Ready licensing or newer with your core Microsoft software, you can’t “remove” SOP, POP, Inventory for example just because you 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 your partner/VAR.

Talk to your partner/VAR

The repeating message here is talk to your partner/VAR. They should know your implementation details to have that conversation with you and it’s in their best interests too, to see that you’re getting the most value you can out of your investment. If you find there are things that you think you’re not using, you’ll want to rely on their expertise to help you evaluate that or confirm that before making a decision. If there are things you can implement, they are also going to be interested in seeing how they can assist you in successfully doing that!

comments powered by Disqus
Built with Hugo
Theme Stack designed by Jimmy