4 mistakes companies make with SaaS cost estimating

The devil, as they say, is in the details. Don't get tripped up on these common mistakes when calculating SaaS implementation costs.

If you are contemplating a digital transformation initiative that includes migrating to a SaaS solution, one of the key factors you'll evaluate is the total cost.  But don't stop there. For a more accurate total cost estimate, you'll want to break the costs down to the external costs of the annual contract value for the SaaS subscription and the one-time implementation costs.  

Avoiding these common mistakes will help you better estimate SaaS implementation costs.

1. Reliance on a high-level range estimate from SaaS provider or system implementation (SI) partner

Your SaaS provider’s primary focus is on closing subscription deals. The last thing they want to do is scare off a customer with a potentially high implementation cost.  The same concept applies to your systems integrator (SI) partner.  They want to close the deal and begin the project as soon as possible. 

Presenting an initial estimate on the high end may lead a customer to consider other partners or even cancel or delay a project.  Additionally, the SI partners work closely with the SaaS providers and therefore, are cautious not to do anything that will put the SaaS provider’s deal in jeopardy.  So, both of them may be motivated to present a low initial implementation cost estimate.

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