Indirect Costs of Electronic Plan/Document Review, Permitting, Inspections & Licensing solutions for Government Agencies

In our previous blog post, we discussed the Direct Costs of purchasing Electronic Plan/Document Review, Permitting, Inspections & Licensing solutions for Government Agencies.  In some ways Direct costs are easy to understand – they pertain to money that is paid to the software or hardware vendors when the decision to purchase software has been made. However, in addition to these costs which are apparent, factoring in a host of Indirect Costs might be even more important to the success of the implementation. In this article we will discuss in detail why these Indirect Costs matter and the questions government agencies can ask to uncover and make sense of them.

1. What is the impact (both monetary and non-monetary) to your organization's Busi ness processes?

In the direct costs section we already took into account the cost of configuring and customizing the software in order to better align with your business process. However, a common scenario that arises during implementation is one where even after the software has been customized and configured to the extent possible to match the government agency's business processes, the agency is still required to change its processes in order to better align with the way the product operates. It is important to consider the impact that change has on your organization. For example, How will the people being affected view this change? Will they understand the need for the change and be on-board or will they resist these changes? What will this change in the business process cost the organization? What are the costs of communicating, convincing and training staff to adapt to the change?

2. What if the solution does not meet my expectations? Will I be locked-in with this solution and this vendor?

While various factors make the particular Land Management Solution you are considering attractive, be sure to ask what the terms of the purchase are. Will the purchase involve a contract with the vendor for a certain minimum period of time? Having a contract in place might be the right way forward for your organization if the contract allows the setting up of a win-win outcome between you and the vendor. If the vendor is able to offer better prices, or support when you sign up for a minimum period of time, then that might be a mutually beneficial situation to you both. However, it is important to consider the risks of ending up in a situation where you are unhappy with the product, with the support, or with the integration of the product with other systems in your organization and then realize that you are locked-in with the product and vendor for the long term.

3. If I purchase this product, will it mean I require an in-house IT department? If I already have one, will the new solution make my department more dependent on IT?

Some Electronic Plan/Document Review, Permitting, Inspections & Licensing solutions require the hardware and software necessary to run the system to be hosted in your organization. These are referred to as “On-Premises Software”. In such situations it is important to understand if the solution requires you to have an in-house IT department who can serve as the first responders for issues. In some situations the solution might not require an IT Department to troubleshoot issues relating to the software itself, but might still require IT to be responsible for the hardware infrastructure (ex, Network, Servers, Storage etc). If the product requires you to rely on your in-house IT, does your IT Department currently have the necessary resources (both human and infrastructure) to be able to handle the additional load?

The various Indirect Costs listed above play a very important role in the success of the Electronic Plan/Document Review, Permitting, Inspections & Licensing solution you purchase. They involve indirect monetary costs and organizational risks which must be factored in before a decision is made. Not factoring in these costs could have dire consequences not only in terms of the final cost to your department but also in terms of your credibility in your organization.

In the last two posts in this series, we have covered the Direct Costs and Indirect Costs that government agencies must take into account while purchasing an Electronic Plan/Document Review, Permitting, Inspections & Licensing Solution. In future posts we will cover the most important feature sets that constitute these solutions.