Software, in my view, is the only capital good in the world that does not have a residual value. Did you ever see an advertisement on Ebay saying “SAP software for sale because over complete, sharply priced”? Replacing company software is the purest form of wasting capital. So before changing to Dynamics NAV what should we think about?
Which is why it’s important to do your research first (click here to see our guide to switching systems)
Every used capital good has a certain value on the second-hand market. It doesn’t matter whether we are talking about a phone, a machine or a building. As a consequence, the purchaser does not have to depreciate the purchased good down to a value of zero, which decreases the annual costs.
Standard software, however, is a different story. You do not buy the system, but only the one-time license of usage. If at any point you decide to cease using it there is no residual value. This is clearly also the case even if you never start using the system. But this does not even present the complete picture, for also implementation and training are connected directly with the software system. If you discard the system, you can also say goodbye to these investments!
Therefore, you would expect that potential buyers of business software pay close attention to the expectation of continuity of system and provider. And to innovation and future growth. But this is not the case! Even worse: for 5% extra reduction a provider is discarded that has 50% better expectations for continuity. If this cheaper system is already in need of replacement after a small number of years, the question arises whether it was really that cheap.
If you are facing the replacement of your company software, try to minimize the chance of another waste of capital. Ask for clear guarantees of at least 5 years of active maintenance. Do not accept a quotation that lacks an outline of how to grow into subsequent versions of the system. And have yourself be informed about the financial consequences of the transition.
Long-term usage of one and the same system usually forms a solid basis for a positive yield of your investment.
Dynamics NAV can offer you this and so much more. All you need to do is contact us for a no obligation demo
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