If the price of your project management software was calculated based on your ACV, you are paying too much. As someone on the software company side, I can assure you YOUR financial portfolio has no bearing on the cost to create/maintain a software application, or the value it will bring your company.
What is ACV Pricing?
ACV is a pricing model where software companies charge customers a fee based on the size of their annual contract value. Most often, you receive a quote after submitting your financials to the software vendor. The rational (if there is one) is that larger customers will pay more than smaller ones because they use the system more and therefor get greater value from the software program. Seems fair, right? WRONG. Signing an ACV contract just means you agree to give a percent of your top line revenue to your software vendor. At the end of the day, the software vendor is selling the same software package to everyone, you are just paying more to use it than a company half your size. Head-scratcher, isn’t it.
So, how am I paying too much? Let’s do some simple math together.
Both companies in this scenario signed a contract for 10% of ACV.
Company A: ACV of $10M across 2 projects
Annual Software cost is $1M
Company B: ACV of $5M across 6 projects
Annual Software cost is $500K
So, who is getting the better deal? Company C actually, who is paying a flat-rate for a similar software package and pocketing more of their hard-earned money, but we’ll get to that later. 😊
The software vendor is the clear winner here, however Company B is getting the better deal. They are likely using the software more (6 projects), however paying less because their top line is smaller.
The point here is twofold. One, COST – the cost to produce a software package does not change based on who is using it. Two, VALUE – the software program offers the same VALUE to all companies, regardless of their top line revenue.
I need to make a change, now what?
Everything is expensive right now. Why not keep as much of your money as you can while still managing your project documents with world-class software? To break out of this cycle, give ConDoc a call to discuss their document management solution. ConDoc offers flat rate pricing with unlimited users, documents, and no hidden fees. Run 2 projects, pay for 2 projects, running 10 projects, pay for 10 projects, etc., regardless of your ACV. The unlimited option is great for larger companies, typically costing a fraction of what they are used to paying.
ConDoc offers end-to-end file and document management, making it easy to stay on the current set, communicate in real time with the entire project team, collaborate around changes, and control plan sets, timelines, and budget. Our robust auding captures all activity, per document, across your project portfolio minimizing your risk.
ConDoc, Feature rich and cost-effective document management software. Take charge on the one thing you CAN control, call us today!