Understanding the real costs of a new Permitting and Licensing system

In each sales opportunity eventually the topic of “how much is this going to cost” will come up in conversations with a customer.  Buying a new permitting and licensing system has several cost factors that need to be considered, and in this blog post, we’ll unpack those factors to provide some insight into how Oracle has streamlined these to make the buying decision more straight-forward for customers.

Licensing Costs

The first factor is the annual licensing cost for your software subscription. At Oracle, the primary basis of the licensing cost is the number of named agency users of the system.  Included in our model are unlimited user accounts for registered public users (i.e. applicants, property owners, contractors, etc.).  Compared to the licensing model some other vendors use – which has you pay for a tiered number of users (i.e. 1-50 users, 51-100 users, etc.), we believe our model is better because you pay for the number of agency users that use the system and don’t get stuck paying for any that do not. 

In addition to covering your software subscription, our annual licensing cost also includes customer support and ongoing product updates.  We’ll describe those in more detail later on.

Implementation Costs

The second cost factor is the price for professional services to implement the Oracle Permitting and Licensing (OPAL) system based on an agreed-upon scope of work.  The implementation costs are usually assessed on a deliverable- or milestone-based payment schedule, and those payments are typically calculated based on an hourly rate multiplied by the level of effort to complete the deliverable or milestone.  That is, generally speaking, the calculation most vendors use to determine implementation costs.

It’s not uncommon to see a significant difference in implementation costs between vendors.  And you’d be right to ask yourself “if vendors are being asked to provide a cost for the same scope of work, why such a big difference in the results?”.  Here are a few explanations that I’ve seen:

1. Some vendors will sell you a product where they will install it but do little work in terms of adapting the software to meet your specific needs.  Their expectation is for customers to use the product as it is designed and adjust their business processes to fit their product. 

Think about it for a moment:  if a vendor tells you it’s going to cost $100,000 to implement their software, and to make the math straight-forward let’s say the vendor charges you $1,000 per day per implementation resource, you would get the level of effort based on the number of resources shown below:

I don’t believe I’ve ever seen an implementation team of one, and if you do you should be asking a lot of questions about that vendor.  Even a team of two resources should raise eyebrows, and with that, you’re only getting them for 10 weeks of full-time work, barely more than two months.  Unless you are looking for a system to use “right out of the box” where considerations such as integrations, data migration, and reports are minimal or non-existent, you need to make sure the implementation services and system being proposed are going to meet your agency’s needs.

2. Another way vendors are able to keep their implementation costs down is by employing technology “generalists” who don’t have a deep understanding of your business or the technology they are working with.  The risk you run with inexperienced implementation resources is they may leave you with a system that does not meet your needs, or they may request change orders for additional payment to correct issues with your system based on their lack of understanding of your needs.

In contrast, Oracle Consulting Services employs resources that have many years of experience in permitting and licensing (on average they have 10+ years experience).  You can read more about their experience in other posts we’ve written here;

3. Finally, some vendors rely on “post-implementation” charges to keep their implementation costs relatively lower.  For example, they may charge you to make changes to your systems such as updating forms or workflow.  Or similarly, the system may be too complex or technical in nature where you need to bring back their resources to make the change for you.  They may also charge you to request an enhancement they’ll deliver in the future. 

Oracle doesn’t rely on these charges, and in fact, we built our system to be user-friendly so that many types of common business changes – such as creating new transaction types, updating application forms, managing workflow, and adjusting fees – can be done without the need for technical skills or expertise.  We also deliver customer enhancements that are incorporated into our product roadmap at no charge to the customer.

Support  Services

In addition to providing access to the software, Oracle’s licensing costs include two other services:

• Support for Oracle cloud applications is included in the cost of your licensing subscription.  This includes 24/7 help through the MyOracle portal, and 24/7 technical support provided over the phone.  It also includes non-technical support available during normal business hours (local time), as well as access to product documentation and knowledge base, user groups, customer collaboration, and much more.
• Your annual licensing also includes major product updates that are delivered four times a year and applied to your environment by Oracle.  Other vendors typically deliver major product updates once or twice a year, and in some instances charge customers to deliver their requested enhancements.

Bringing it All Together…

It can be difficult to fully understand the real costs of a permitting and licensing system, especially if there is a significant difference in the costs that vendors provide you.  Make sure you discuss the cost factors above with each vendor you are considering, and if you are unclear about what their costs represent or the level of services they will provide be sure to ask.  Be mindful that your new system should last for many years, and small differences in post-implementation costs or differences in services will add up over time and may exceed the total costs of a vendor whose implementation costs are a bit more but provides comparably better post-implementation experience.

Learn More

Modern cloud technology solutions can help public sector organizations overcome many of the challenges they face. By migrating to the cloud with Oracle Permitting and Licensing, organizations can embrace innovation and push the limits of what their employees and constituents have come to expect from their government.  Oracle is excited to be able to partner with government organizations on their journey to the cloud, and you can discover more about our Permitting and Licensing product here.