How Many Times Should You Pay for Your ERP Solution?
The logical answer to the question above should be one. You should have to pay exactly one time to get your ERP software solution designed, deployed and delivering the results you want. Unfortunately, this is rarely the case.
I know this because many Rand Group clients did not buy their software from us originally. They purchased an ERP system from another partner, and later realized they weren’t getting the results they anticipated. As they sought answers, Rand Group provided solutions to their problems.
We love to help clients get the most out of their solution, and we never hesitate to explore all the ways in which that can be done. However, we don’t like that so many of our clients are being forced to pay for their solution more than once, just to get the functionality they deserve.
So why do people repeatedly pay for their ERP solution to work?
First, let’s all agree that deploying an ERP solution can be extremely disruptive to your business. While it needs to be done, it’s a huge undertaking that will create some friction across your organization. The goal is to limit the amount of disruption and maximize your results, so in the end, you realize the value in the project.
However, the reality is that most software deployments get off course before they even start. That’s because companies today treat software purchases like they do commodity purchases; and that flaw in the buying cycle sets the trajectory for failure.
Let’s look at how flaws in the buying cycle contribute to poor results in your ERP deployment:
- Keeping the software provider at arm’s length: Trying to keep the solution provider out of the buying process will not lead you to success. When we think of solution providers as simply those with whom we negotiate the best price, we miss their value. The solution provider should be just as integral to your decision making process as your software, if not more.
- Protecting the executives: Somehow, people have decided that executives are too busy to participate in the software buying process, and that’s a fundamental flaw. Executives know best what the company needs from a high level perspective; by not actively participating in requirements gathering and decision making, they contribute negatively to the project.
- Buying the demo: No one can fault you for wanting to see the software in action, but making a purchase decision based solely on what a salesperson shows you is erroneous. Anything and everything will work in a demo environment; what’s more important is how the software can work in your environment.
- Assuming you’re only purchasing software: The software itself is a commodity purchase, but that’s not the only thing you’re buying when making an ERP decision. By treating the purchase solely as a commodity, you’re buying from someone who only knows the software. What your business really needs is someone who knows the software, and who has the business and accounting acumen to implement it for you.
- Making price based decisions: Software is expensive, and it’s alluring to price shop the best deal. While you need to be sensitive to your budget, it’s important to realize that by not paying for the business competency to deploy your solution, you’re going to spend more money overall.
- Lacking preparation: You know you need software, but do you know why? Many organizations start this process with the intent to buy software without first identifying what the software should do. Business impacts and functional requirements should be explored prior to decision making, so that the software person is not required to make accounting decisions on your behalf.
- Ignoring the people factor: In reality, software is the smallest part of the solution. Most ERP solutions can solve most business challenges right out of the box; it’s the people implementing the solution that extract true value from it. Executives should communicate business drivers, CFOs should participate in all decisions around accounting processes, and your solution provider should have the skill and experience to effectively guide you.
By making software a commodity purchase, you create a dynamic that almost guarantees you’ll be paying for the system more than once – you get less functionality than you need, pay more than you should and delay your deployment for much longer than if you approached the purchase with proper due diligence. Start the process by looking for a software provider with business and fundamental accounting experience, who understands both software and your industry. Once you’ve found a partner, work with them to define and seek a solution to best suit your business needs.
Only then can you be sure you only have to pay for this deployment once.
– Software Delivered as Promised. No Surprises.