28 Oct Get Smart About Total Cost of Ownership & Hidden Costs
As we race toward serialization deadlines, one of the questions we frequently get from pharma manufacturers, CMOs, 3PLs and repackagers is this: how do we really qualify total cost of ownership (TCO)?
To take a line from Facebook, “it’s complicated.”
In an attempt to simplify this complex question, we’ve outlined a few key things you should think about when determining what your total cost of ownership will be for a serialization solution.
Understand how infrastructure and architecture impact TCO
To minimize your confusion when evaluating serialization platforms, it’s necessary to understand that there’s a major difference whether the pharma brand hosts the entire solution within their enterprise, which does incur infrastructure costs. In a cloud-based architecture, like OPTEL’s Verify Brand® Software, the solution is hosted by the service provider so there are NO costs incurred for hardware, maintenance or management. Most serialization solutions operate in the cloud and are NOT. Simply put, Verify Brand’s cloud-based architecture does not incur any infrastructure costs for the buyer.
Ask the right questions about hidden costs
A hidden cost is a fee a solution provider conveniently forgets to tell you about. When evaluating a serialization software proposal, ask the vendor about each of the features listed in the table below. Principled providers will be open and honest about your total TCO, while providers without integrity will tell you, “Don’t worry about it.”
At OPTEL, we’re completely transparent in our pricing. Customers using Verify Brand’s cloud software incur no hardware/infrastructure, IT personnel, maintenance, or storage costs whatsoever, as explained below.
|POTENTIAL HIDDEN FEE||VERIFY BRAND PRICING|
|CUSTOMIZATIONS||Many vendors will ding you with professional services fees every time you want something custom added. OPTEL’s Verify Brand Software is architected to be flexible and configurable without the need for custom development. When our customers have great ideas for new features, we roll those into our standard product offering. Be wary of solution providers that can’t offer you the ability to customize. If you’re not one of their bigger customers, good luck seeing your ideas come to fruition.|
|DOWNTIME||We provide zero downtime deployments. No interruptions to your business mean no hidden fees for disruptions or lost efficiency.|
|INTEGRATION WITH BUSINESS SYSTEMS, PARTNERS AND CUSTOMERS||Our pricing incorporates the number of internal systems, partners and customers to be integrated. Need to add more integrations? We tell you your costs up front. Plus, our integrations leverage global standards like EPCIS so you’re not locked into proprietary formats that can’t meet your changing needs over time.|
|MASTER DATA||Need new master data set up in your system? It’s all covered under your standard Verify Brand support agreement.|
|SERIAL NUMBER & TRANSACTION FEES||We believe your business growth is something to celebrate, not a reason for us to charge you more. That’s why we have no serial number or transaction fees.|
|SUPPORT||Fixed annual support fees are defined from Day One. OPTEL’s support always includes full 24/7/365 global coverage.|
|TRAINING||We want your users to use our platform, so multiple training sessions are included in all our standard implementations.|
|UPGRADES||Access to all system upgrades, now and forever, are part of OPTEL’s standard support. You have total control over which upgrades you’d like and when those upgrades are deployed.|
|VALIDATION||We offer multiple levels of validation support, which covers not only what’s needed to get you up and running, but all validation activities going forward. You pick the level of validation support and immediately know the fixed cost.|
Unfortunately, there are a few more hidden costs some solution providers conveniently leave out of their sales pitches:
- Validation – Don’t forget about the extra people you’ll need to hire to manage the forced system changes/upgrades. With no control over the scope and timing of system changes, plan on having someone heavily dedicated to reviewing system changes.
- Reporting – Are you getting all the necessary reporting directly from your solution? If not, you’ll need to budget for an external reporting tool as well as additional resources to build those reports.
Remember that TCO is a two-sided equation
Sure, it’s easy to focus mostly on the cost side, but what about the savings side? A solution that can save you money throughout your business operations is going to give you the best long-term TCO. OPTEL’s experience with customers across many industries has resulted in millions of dollars in cost savings in areas like counterfeit reduction, grey-market diversion prevention, returns processing and supply chain optimization. (Call us! We’d love to share our success metrics with you.) Platforms that are only capable of checking the compliance box can’t do this for you.
The bottom line is that total cost of ownership is a complicated topic, not one that can be summarized with a simple graphic. As the pharmaceutical industry evaluates serialization solution providers, it’s hard to separate fact from fiction when flooded with misinformation. When it comes to TCO, trust empirical facts and figures rather than empty claims and promises. And be vigilant when a solution provider attempts to justify why their solution is more expensive at the outset. You should worry if they say they’re going to charge you more up front and every year going forward, but that over time, your TCO will be lower.
Trust proof. We have 30 years of evidence to illustrate why a cloud-based solution is your most cost-effective choice for TCO, hands down.