A believable NEC software business case rests on your own history, not a supplier's headline. List what actually happened on your recent contracts, put a cautious value on what a system would have changed, and compare it with the full cost of running one, including your people's time.
The method below takes a morning, provided your records can be found. We won't give you a return figure, because it depends on your volume of change, how your contracts are run now and which side you're on. If the sums come out small, that is a useful result too. This page is part of the NEC contract management software guide.
The method in five steps
- Choose your evidence. Take two or three recent or live contracts. Avoid the worst one, as it won't convince anybody.
- Count what happened. Look for compensation events by number, reply dates missed by either side, failure notices, events notified late, and hours spent on tracking and reports.
- Value only what a system would change. Our guide to what poor administration costs shows the formulas, and says which losses software does and doesn't address.
- Add every cost. Not just the supplier's figure. See the cost list below.
- Test it against a sceptic. Halve the benefit you're least sure of. If the case only works at your most hopeful figure, say so.
A worked example
All figures here are fictional and illustrative, for a contractor with three live NEC contracts. Replace each one. The figures are there to show the arithmetic, and they aren't a benchmark.
| Benefit line | How to work it out | Illustrative | Yearly figure |
|---|---|---|---|
| A. Tracking and chasing time | Hours saved a week × hourly cost × working weeks | 5 × £50 × 46 | £11,500 |
| B. Monthly reporting time | Days saved a month × daily cost × 12 | 1 × £400 × 12 | £4,800 |
| C. Avoided commercial losses | Events lost or nearly lost in a year × typical value × your honest estimate of how many a system would have saved | 3 × £30,000 × one in six | £15,000 |
| Total | £31,300 |
Show A and B together as the main case. That is £16,300 of time, and it can be tested on a real week. Show line C separately as a risk reduction, and don't let the whole proposal rest on it. A finance director will reasonably distrust "avoided" sums, and one in six is a judgement. If you can't support your estimate from your own near misses, leave line C out and mention the risk in words.
Line A also needs an honest answer to a further question: what will those hours be used for? If the answer is "nothing in particular", it's a better working week rather than a saving.
Costs that belong on the other side
| Cost | How to work it out |
|---|---|
| Subscription or licence | Get a written quote for your likely user numbers and contracts over the term. Ask what happens if your work grows. |
| Setting it up | Days × daily cost, covering periods, clauses and users on each contract |
| Moving live contracts | Open items per contract × time per item. See moving a live contract onto software |
| Training | People × hours × hourly cost. Include site staff |
| Ongoing admin | Hours a month for someone to own the system |
| Entering what happens off-system | This is new work, and it should be deducted from line A if it isn't already |
| The other side's time | Not your cost, but you'll need their cooperation, and it may need to be agreed |
If you're on the Client or Project Manager side
The lines change. Line C becomes quotations that could be treated as accepted, assessments that drifted and late replies that became compensation events under 60.1(6). You might add a line for governance, namely the time spent answering questions from auditors and boards. That is hard to value, so describe it instead of pricing it. Why clients use NEC contract software has more on this.
What not to claim
- "It will prevent disputes." It may narrow them. See how good records reduce disputes.
- A supplier's or anyone else's headline figure. It isn't about your contracts, and it won't survive questioning.
- Savings on staff numbers, unless you've actually decided to make that change.
- A loss you could have prevented with training or a process change. Those are cheaper, and an honest case says so. A spreadsheet can be enough on a small, simple job, as our comparison explains.
Shaping the proposal
Keep it to one page: the problem in your own contracts' terms, the two numbers, the costs, the risks and a modest first step. A good first step is one or two live contracts, reviewed before going further. Expect the questions in answering your finance director's questions.
When you get to the supplier's line, test what the system does on your own contract before you commit to a number. To go through that with Contract Status, book a call and bring the contract you used as evidence. We can talk through how its registers, periods and clause library would apply, and you can judge for yourself what belongs in your benefit column.
Related guides
- NEC Contract Management Software
- Moving a Live NEC Contract Onto Software
- Answering Your Finance Director's Questions on NEC Software
- Keeping NEC Knowledge When People Move On
- What Poor NEC Administration Really Costs
See how this works in practice
Click through Contract Status with sample contracts: raise the notice, reply to it, and watch both sides of one record.
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Test your NEC knowledge, use the free NEC tools or download free NEC templates.
This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.