Chapter 6 - Where to Look & Pricing

Chap­ter 6 — Where to Look & Pricing

When to Engage with Soft­ware Vendors

You may be in the very ear­ly stages of your project. You may not have stake­hold­er buy-in or a signed-off bud­get. But there is one clear ben­e­fit to get­ting in touch with ven­dors ear­ly on: see­ing a solu­tion in the flesh can move your think­ing for­ward very quick­ly. Yes, you need to nail down a strat­e­gy and do the dis­cov­ery work we talked about ear­li­er. But don’t under­es­ti­mate the way that a quick demo or con­ver­sa­tion can give shape to your thoughts in the ear­ly stages. 

There’s a lot to con­sid­er when mov­ing from annu­al appraisals to con­tin­u­ous per­for­mance man­age­ment. We often meet HR and Tal­ent peo­ple who are incred­i­bly stretched for time, and may feel a lit­tle daunt­ed by the scope of the project. Down that path, some­times, lies iner­tia: how do I kick this off? Where do I find the tools I need to deliv­er it?

We cov­er quite a lot of this in one of our webi­na­rs, but the gen­er­al point here is: don’t let the per­fect be the ene­my of the good. Ven­dors are the front line: they see cus­tomers deal­ing with and mov­ing past these prob­lems every day. At Clear Review, we often con­duct demos with cus­tomers who specif­i­cal­ly tell us that they’re in the ear­ly stages of the process. Despite that, they often go away real­ly ener­gised and con­fi­dent that there’s a way past the road­blocks. If you’re con­cerned about being has­sled by sales­peo­ple or set­ting false expec­ta­tions, just be trans­par­ent. Telling peo­ple ​“I’m hap­py to talk again but not for three or six months” is per­fect­ly reasonable.

Where to Look?

Word of Mouth

The first place you should look for a poten­tial per­for­mance man­age­ment soft­ware part­ner is with­in your exist­ing net­works. Peo­ple have made this change, and you may already know one. If not, try Linkedin groups: our expe­ri­ence is that when an HR leader has deliv­ered a project like this, they’re always hap­py to explain how they did it and offer advice. 

Google Organ­ic Search

In order to achieve a high rank­ing on Google, a soft­ware provider will need to be cre­at­ing reg­u­lar, rel­e­vant and qual­i­ty con­tent. Although a page one-ranked web­site doesn’t nec­es­sar­i­ly mean they’ll be a great part­ner, at least it’s an indi­ca­tion that they con­sid­er them­selves a key play­er in the space and have invest­ed time and mon­ey in rais­ing their profile.

The Google Ads at the top of the page are prob­a­bly less impor­tant. Although it’s unlike­ly any busi­ness would invest mon­ey in adver­tis­ing some­thing they can’t do, it’s much eas­i­er to throw mon­ey at ads than it is to build a gen­uine organ­ic rank­ing based on thought lead­er­ship and qual­i­ty content. 

Soft­ware Aggre­ga­tors

If you Google ​“per­for­mance man­age­ment soft­ware” some of the first list­ings are the likes of Capter­ra, Soft­wareAd­vice and G2. These are search and review sites for soft­ware solu­tions. The user reviews will give you a bet­ter sense of what each solution’s strengths and weak­ness­es are. How­ev­er, it’s worth not­ing that they don’t have the same lev­el of rigour as Google organ­ic search, and there can be some smoke and mir­rors involved. For exam­ple, it’s not always clear whether a high rank­ing has been earned or paid for. And although a num­ber of reviews is a use­ful met­ric, if a com­pa­ny has been around for 15 years it might have plen­ty of reviews, but anoth­er com­pa­ny with few­er reviews might be a more mod­ern and effec­tive solu­tion that sim­ply hasn’t been around as long.

Fol­low the Qual­i­ty Con­tent

If you’re research­ing con­tin­u­ous per­for­mance man­age­ment best prac­tices, pay spe­cial atten­tion to the soft­ware providers whose arti­cles, eBooks and resources add gen­uine val­ue to your research jour­ney. If a ven­dor seems to be ​‘speak­ing your lan­guage’ and pro­vid­ing insight into the chal­lenges you are fac­ing, it’s like­ly that their tech­nol­o­gy will at least be try­ing to address these same chal­lenges. It might be worth book­ing a demo based on that rea­son­ing alone. 

Pric­ing Considerations

It’s impos­si­ble to tell you exact­ly what you should be pay­ing — everyone’s needs and resources are unique — but there are some con­sid­er­a­tions you can use to guide your think­ing. Once you’ve seen a few demos and had the pro­pos­als through (assum­ing you can’t just get the pric­ing direct­ly from the vendor’s site) you’ll quick­ly get an idea of the bud­get you’ll need. 

Busi­ness Case — What is the cost of poor performance? 

This is a com­plex top­ic but it is worth think­ing about whether you can estab­lish a guide­line fig­ure that rings true with senior stakeholders. 

One way to do this might be through engage­ment. There is sub­stan­tial research out there which shows that dis­en­gaged employ­ees are both less pro­duc­tive and more like­ly to leave than their engaged coun­ter­parts. If you can cre­ate a cost for replac­ing a dis­en­gaged employ­ee (on a slid­ing scale of salary per­cent­age, based on senior­i­ty) and show that strong per­for­mance devel­op­ment boosts engage­ment, you’re on your way to a real-world num­ber. And it’ll be far high­er than the cost you’d be look­ing at for a piece of per­for­mance man­age­ment software. 

To look at this in more depth we have a Per­for­mance Man­age­ment Soft­ware Busi­ness Case Tem­plate which we’re hap­py to share. 

What are the dif­fer­ent pric­ing elements? 

There are usu­al­ly three com­mer­cial ele­ments to con­sid­er: the annu­al sub­scrip­tion cost; the cost of imple­men­ta­tion; and the min­i­mum con­tract com­mit­ment term. 

A sub­scrip­tion cost is usu­al­ly a straight­for­ward equa­tion: the num­ber of users X annu­al cost per user. There may be options to pay for addi­tion­al func­tion­al­i­ty or mod­ules to be switched on or off. 

Imple­men­ta­tion cost can vary wild­ly from free to tens of thou­sands. Our view on imple­men­ta­tion cost is that the era of cost­ly cus­tomi­sa­tions and in-depth user train­ing projects should be com­ing to an end. Soft­ware should do what it says it can do with­out major con­fig­u­ra­tion. When it comes to per­for­mance man­age­ment, if peo­ple can’t sim­ply log in and use it then it’s prob­a­bly too com­pli­cat­ed and no amount of train­ing can fix that problem. 

Min­i­mum con­tract length often depends on the size of the spend. It is also linked to the imple­men­ta­tion cost (or lack of). For a Soft­ware as a Ser­vice ven­dor a sig­nif­i­cant amount of the resource com­mit­ment is up front. It might make sense to offer free imple­men­ta­tion on a two-year con­tract as the costs will be absorbed, but if it’s a one-year con­tract the ven­dor may need to charge for imple­men­ta­tion up front. 

What out­come are you pay­ing for?

Keep your end goal in mind at all times. What are you real­ly aim­ing for here? If you want to dri­ve adop­tion and get your peo­ple hav­ing those mean­ing­ful per­for­mance con­ver­sa­tions and shar­ing feed­back, that should inform your assess­ment of the cost. 

It can be tempt­ing to go for a ​“bang for buck” approach: how much stuff and how many fea­tures am I get­ting? All we’d rec­om­mend is that you think back to our ear­li­er points around clar­i­ty and usage. A prod­uct with fif­teen areas of func­tion­al­i­ty devel­oped over the years is also like­ly to be a cum­ber­some, con­fus­ing beast that your users just won’t use. In that case, it doesn’t mat­ter how much you save or how much val­ue you think you’re get­ting. If it won’t do the job you bought it to do, you’ve wast­ed your money. 

Sum­ma­ry

This is a cul­mi­na­tion, of sorts, for myself and the team at Clear Review. After a cou­ple of years evan­ge­lis­ing the con­tin­u­ous per­for­mance man­age­ment phe­nom­e­non, it feels as though we’re well past the tip­ping point. No one needs to be told that annu­al appraisals are a mis­ery any more. And almost every poten­tial cus­tomer we meet is look­ing for a way to man­age per­for­mance in a con­tin­u­ous and human way.

It’s great news for buy­ers too: it real­ly is a buyer’s mar­ket. You can spend as much (and almost as lit­tle) as you want. There’s more free con­tent online — in the form of white papers, research, webi­na­rs and what­not — than you could read in a life­time. So thanks for tak­ing the time to read this one.

But the truth is that, despite all the great think­ing that’s been done on the sub­ject and great strides that have been made in soft­ware devel­op­ment, you still need to be wary. As we men­tioned in Chap­ter 4, there are plen­ty of ven­dors of var­i­ous sizes claim­ing to be able to deliv­er a con­tin­u­ous solu­tion for you. And they’re still sell­ing the same thing they built a decade ago, only now with added bolt-ons. I hope I’ve offered some clar­i­ty on how to approach the sales process and the obvi­ous traps to avoid. 

But what I hope most of all is that you come away from this with excite­ment and enthu­si­asm. Cre­at­ing this sort of cul­tur­al change in your own organ­i­sa­tion is a tru­ly amaz­ing thing (we have a cus­tomer whose staff erupt­ed into spon­ta­neous applause when they were told that the annu­al appraisal was being con­signed to the dust­bin of his­to­ry). And when it’s up and run­ning, and you see man­agers talk­ing to employ­ees on a reg­u­lar basis and the feed­back rolling in, per­haps you’ll feel enti­tled to spend just a moment pat­ting your­self on the back. 

You did that.