Ask a vendor what their construction management software costs, and the answer depends on how they price it. Some charge by the number of people who use the system, others based on your annual construction volume, or how much construction work your organization does in a year.
How often you use the software and how much you build do not always move together. You might win bigger jobs next year without adding a single user. You might also add users while your revenue stays about the same.
This article looks at both pricing models, how each one works, and what to check before you sign.
Construction Software Cost Summary
- Per-user pricing ties software cost to the people who use the platform, creating a direct connection between usage and price.
- Revenue-based pricing sets the software cost to Annual Construction Volume (ACV), the total value of the work an organization builds in a year, so pricing rises as construction volume increases.
- Locked terms and renewal resets make a revenue-based cost harder to predict than one tied to the size of your team.
- Organizations evaluating software should understand what causes the price to increase and how those increases will be calculated over time.
- ProjectTeam.com uses per-user pricing for internal users and allows external project participants to collaborate at no additional cost.
Two Pricing Models Behind Construction Software Cost
Most of what you pay each year comes down to one of two pricing models:
- Per-user pricing: You pay based on the number of people who use the system.
- Revenue-based pricing: You pay based on your organization’s annual construction volume, or the value of the work you manage each year.
The same construction management system can be sold either way, and the difference becomes more noticeable as your organization grows. Organizations that reach this point often begin to look at other platforms.
With per-user pricing, you pay for the people who need access to the software. Add a division next year, and your cost increases by the number of new users that division requires. Because your organization controls how many people use the system, future costs are generally easier to estimate.
With revenue-based pricing, the cost is tied to annual construction volume. As your organization takes on more work, the software cost increases as well. The idea is that a larger organization pays more than a smaller one for the same software.
For example, your organization might take on larger projects or increase annual construction volume without adding any new software users. Under a per-user model, your cost stays the same because the number of users hasn’t changed. Under a revenue-based model, your cost increases because the value of the work has increased. The software is the same. The number of people using it is the same. Only the amount of work changed.
Why a Strong Year Shouldn’t Raise Your Construction Software Cost
Revenue-based pricing also raises the question of whether software should cost more simply because your organization is expanding its project portfolio. When your costs go up because you had a strong year, you’re paying your software vendor more for results they had no part in. Your teams won the work. Your people delivered it. The software recorded it.
Brian Rothery, who leads implementation at ProjectTeam.com, puts it this way:
“Our job is to help our clients grow, not to take a cut when they do. Predictable pricing means they can scale their business without wondering what their software will cost next year.”
A per-user model keeps pricing tied to software usage. You pay for the people who use the system, and the cost changes only when you add more users. If your organization takes on more projects with the same team, the software cost stays the same.
What “Per-User” Means for Your Construction Software Cost
Per-user pricing sounds straightforward, but vendors do not always define a user the same way.
On most construction projects, people from multiple organizations need access to the software. Your staff, owners, contractors, subcontractors, architects, engineers, and consultants may all participate in the same project.
Some vendors charge for everyone who accesses the system. Others charge only for users inside your organization while allowing external project participants to collaborate at no additional cost.
Two platforms can both be described as “per-user pricing,” yet one counts only your employees while the other counts everyone on the project. On a job with many outside stakeholders, that changes what you pay.
Construction Volume Can Rise While Your Team Stays the Same
Your organization can manage additional construction projects without adding a single software user. A construction project team that manages a $50 million program may be the same team managing a $100 million program next year.
Under a per-user model, the cost stays tied to the number of people using the software. With ACV pricing, the cost can increase because annual construction volume increased, even though software usage remained the same.
Both models lock your rate for the term. What to watch is the number the rate is tied to. A per-user rate sits on your headcount, which moves slowly and by small amounts. An ACV rate sits on your construction volume, which can swing by millions from one year to the next. That rate is often locked for a multi-year term, then reset at renewal. A reset moves the cost up to match a bigger volume. It rarely moves the cost down to match a smaller one.
You Can Plan for a Cost You Can Predict
Staffing plans, department growth, and hiring decisions make future user counts relatively easy to estimate. Construction volume is harder to forecast because project schedules, funding availability, and contract awards can all change throughout the year.
With per-user pricing, software costs stay tied to the number of people using the platform. If your organization plans to add users, you can estimate the new cost. If staffing stays the same, software costs generally stay tied to the same number of users.
Because user counts are easier to forecast than annual construction volume, per-user pricing tends to make long-term software budgeting more predictable.
Choosing a Construction Software Pricing Model That Fits Your Growth
Most organizations buy construction management software expecting to grow. They plan to win more work, take on larger programs, expand into new markets, or add staff over the years the platform is in place.
A pricing model should support that growth in a way that is easy to understand, especially for scaling or small business construction firms. The closer software costs stay to something your organization can predict and manage, the easier those costs are to budget over time.
Before choosing a platform, ask:
- If we win a larger program next year with the same staff, what will happen to the price?
- If we add ten users, how much does the cost change?
- What causes the price to increase at renewal?
- If our needs change and we move to another platform later, how will our project data migrate with us?
The answers reveal whether software costs grow with platform usage, annual construction volume, or a mix of both. They also show how the platform fits your organization several years from now, when your programs and staff look different than they do today.
How ProjectTeam.com Approaches Construction Software Cost
Construction software costs are easiest to understand when they are tied to software usage. ProjectTeam.com uses a per-user pricing model. Organizations pay for the people on their own team who use the platform, and the price reflects the size of that team.
Only internal users count toward licensing. External project participants can access project information without an increase in user fees.
- Internal users are licensed on a per-user basis
- External project participants collaborate at no additional cost
- Owners, contractors, subcontractors, and consultants work from the same project record
- Custom forms, fields, and workflows are included for licensed users
As organizations take on larger programs and manage more projects, pricing stays tied to the platform’s users, so costs can scale with team growth.
Cost is just one part of choosing a platform. What makes the best construction management software also depends on five other areas your organization should evaluate.
To see how ProjectTeam.com fits the way your organization delivers projects, request a demo.
Frequently Asked Questions About Construction Software Cost
What is Annual Construction Volume (ACV)?
Annual Construction Volume is the total value of the construction work an organization completes in a year, added up across all its projects. Some vendors use it to set software pricing, so the annual cost rises as the organization builds more.
How is construction management software priced?
Most platforms use one of two models. Per-user pricing charges based on the number of people who use the system. Revenue-based pricing charges based on your annual construction volume, the value of the work you manage each year. Some vendors also offer a flat fee for a set of users or features.
What is the difference between per-user and revenue-based pricing?
Per-user pricing ties the cost to how many people use the software. The price moves when you add or remove users. Revenue-based pricing ties the cost to how much work you build in a year, so the price can rise after a strong year, even when the same number of people use the system.
How is a “user” defined in construction software pricing?
It depends on the vendor. Some count everyone who accesses the system, including subcontractors, owners, and design partners from outside your organization. Others count only your internal staff and let external participants collaborate at no additional cost. The definition has a large effect on what you pay, so it is worth confirming before you compare quotes.
What makes software costs increase at renewal?
Several things can raise a renewal price. Under per-user pricing, the cost changes when your headcount changes. With revenue-based pricing, the rate is often locked for a multi-year term, then reset at renewal to your current construction volume. If you have grown, the reset drives the cost up. If you have slowed, the cost usually remains the same. A vendor may also raise its subscription rate from year to year or add services to the license. Asking how the renewal is calculated, and what would change it, gives you the full picture before you sign.
