What is the cost of royalty software? The elements of a typical royalty purchase may include:
- Software cost (including user licenses, modifications and third party add-ons)
- Implementation & Training
The software cost is the cost of the software plus any modifications or add-ons that may be required. For example, EasyRoyalties recommends the purchase of TransactionPro Importer if a client plans to import royalty payments into QuickBooks. Other vendors may require customization by your VAR to integrate a solution with your financial systems.
Future upgrades to a new version often involve an additional fee.
A hosted or software-as-a-service solution is provided for an annual fee. With a hosted solution multi-user access from multiple locations is facilitated. This service often includes vendor provided data backups and software updates.
A comparison of royalty software costs should look at the total cost over three years. A solution that requires a low outlay in year one may be substantially more expensive over a longer time frame.
|Year||Local Solution||Hosted Solution|
The table above compares a desktop royalty solution that costs $10,000 to a hosted solution that costs $6,000 a year. The hosted solution that cost 40% less in year one, costs 80% more over a three year period.
Implementation and Training
Software implementation is comprised of data migration and training.
Data migration includes migrating your royalty recipients (addresses, contact information), intellectual property (titles), products (editions), historical sales, royalty contracts and last period ending balances to the new system. Migrating royalty contracts is usually the most time consuming aspect of any royalty system implementation
Most vendors charge for implementation and training. This charge can equal or exceed the first year cost of the software.
For a desktop or client server solution the vendor may recommend a more powerful personal computer to handle the royalty calculations. The hardware specifications for EasyRoyalties recommends a personal computer with an Intel i7 processor if calculating royalties for more than 1,500 royalty contracts.
Some SaaS (Software as a Service) solutions vendors will use a low performance server unless your company requests a high performance server. Larger royalty software clients may look for solutions that are hosted on Amazon Web Services or Microsoft Azure platform. A SaaS vendor may offer a cross-region replication option. Cross region replication duplicates your data in another region to maximize uptime.
Support costs can be an annual fee, an hourly fee or some combination of the two. Support usage will vary widely by application and company. Are your royalty requirements simple or complex? Does your company have a high level of staff turnover? Will your company have a company guru for the royalty solution?
At Book Expo America 2017 we encountered two publishers that used the same royalty solution. One had incurred hourly support costs in the low five figures while the other had zero support costs.
To project your support costs we recommend that companies talk to companies similar to yours that use the royalty software you are evaluating.