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Chris Capistran

When you’re looking for a new AMS or CRM, how important is the budget? Your staff and members can’t afford to let budget concerns drive the whole process of implementing a new system, but that’s often what happens. Everyone would say that features and benefits should be the top priority in theory, but in practice, it is surprisingly easy to let the potential price tag take over. Of course, at some point, you will have to work within a budget, but I want to share two recommendations that I believe will help you and your organization the next time you switch to a new AMS partner.

Here’s the (very) short version of my advice:

  1. Don’t make the mistake of setting a budget in a vacuum.
  2. Don’t overshare your true budget. Hold back 15-20% and keep the inner circle really small so you always have a reserve to tap into.

Let me briefly unpack each of these. See if this advice lines up with the way you ideally want to approach your next implementation.

Don’t Set Your Budget in a Vacuum

Arbitrarily setting a budget almost always creates unwanted complications for organizations. Typically what happens is an ironclad number is identified up front, and then every step in the rest of the process becomes about trying to see how many features you can get for that price. The hidden problems soon emerge, though.

The biggest one we run into with our clients is that as we get midway through scoping their implementation, they find out we have features and benefits they didn’t know about beforehand, but discover they really could use. Then it becomes a painful process of eliminating other items they want or need, but now have to see if they can live without to accommodate the budget ceiling they were already up against.

The other major issue is that estimating the cost of a large-scale, agile implementation is not an exact science.

I’ve been doing my best to estimate and gauge how these projects go for a long time, now, and you just can’t anticipate everything you’ll need to successfully finish your implementation. Every vendor knows this—but some act like that’s not true. If a vendor is giving you an exact quote up front for what an implementation will cost, I think that’s a red flag you should not ignore. They are not telling you the truth about what it will really cost.

Hold Something Back in Your Budget Conversations

When you do settle on an estimated budget—keep it to yourself. I wouldn’t even tell all of your internal stakeholders, especially business users. I know this sounds like loaded advice for a vendor to offer a prospective client, but I believe it works better for everyone if you know what you can spend, but hold something back in your conversations.

Based on our long history of working out AMS and CRM solutions for associations, you should hold back 15-20% of what you can actually afford to spend.

Set your ideal spend low with your vendor to give you wiggle room as the project develops, and it will go much easier for everyone.

Good vendors will include a 10-15% contingency in their proposals and estimates, so this will give you the flexibility you need to adapt to changing priorities and requirements as you navigate your implementation.

Other AMS Budget Takeaways

Here are a few more suggestions for you that build on what I’ve already laid out.

I suggest that you don’t even go to your decision makers and ask for a budget for this project until you’ve talked with vendors in the market to get an idea of what’s available and realistic. When you loop trustworthy vendors into the conversation early, you can be a lot more confident about what you’re paying for and what it will really cost.

If you’re getting bids all over the place then something is probably wrong.

Gather your general requirements, and be prepared to give a reverse demonstration to prospective vendors. Show them what you’re doing today, and what you want to do differently. Then take the estimates and see what you’re getting. If you’re getting bids all over the place then something is probably wrong. In comparing estimates, be sure they really are for comparable features. In this market, vendor prices for an AMS should be within 10-20% of one another. Any lowball offer is hiding additional costs the vendor doesn’t want to reveal upfront, or they don’t actually understand what you do.

Best Practices for Finding a New AMS / CRM

Cobalt has constructed—and continues to develop and refine what we call our Definitive Guide to Choosing a New AMS/CRM for Associations. It’s packed with our best advice, including more considerations for estimating your AMS budget. Read it now, and put it to work for you when the time comes to do your due diligence or change AMS providers, and you’ll have a lot more confidence in your process and final solution.

Read or download the guide

 

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