Buyer Beware

Have you ever walked into a car dealership, an electronics/whitegoods store with very preconceived ideas on what you want for a set budget, only to walk out with something a lot better and a lot more expensive? The same goes for the buyer of ERP Software.. There is this thrill when you’re in the store, getting all excited with the sales person and then one or two weeks later, the novelty has worn off and you’re annoyed with yourself for spending that extra money for negligible incremental benefit/pleasure/aesthetics. Yay, heated seats in Australia is not really necessary, nor is theatre quality surround sound for watching the latest instalment of kid’s animated movies. So after all that you’re not that excited about the new acquisition anymore, but instead feeling negative about another future purchase or family experience that has now been compromised.

I have been there, done that and have plenty to show for it in my life. Be aware, you will have the same experience when buying management software for your business. When it comes to buying and implementing ERP, CRM and it’s associated Business Intelligence, Mobile and Commerce Solutions, please take a pragmatic approach and plan/budget to spend more throughout the ERP lifecycle. You do NOT need to spend it all upfront. Interestingly, in real terms software and the skills to implement them does become cheaper over time. It’s the larger organisations that pay a premium for bleeding edge technology for which we generally do not have a lot of skills, except from the software vendors themselves.

Beware, a lot of ERP and associated solutions do not work out of the box as many would claim, configuration may be required, customisation is generally not a great thing (think heated seats) and the ‘VISION’ that enthusiastic sales people paint is never attainable.

I come back to the point from last week, where it makes sense to involve someone external to guide you through the RFP/ERP selection process. Someone to keep the sales person honest. Test them. Ask questions and ask to be shown how their software addresses your problem. What sometimes is said cannot necessarily be shown. Ask so see your own data or at least a version of it. Not some generic widget, where you on the other hand run a high-tech manufacturing facility.

There are so many analogies that I can think of when it comes to deciding to implement a business solution:

• Building a house. Your first house you build will have compromises, with regards to number of bedrooms or perhaps leaving out a rumpus room. But it has a good foundation and the design will allow for future expansion by going up or going further into your available block of land
• Crawl, Walk and Run. I can’t even remember who first coined this phrase, but it makes sense. Start small and learn, change and grow the foot print of your solution or the level of automation. Business changes and money spent upfront may well be wasted when a change is required and operating conditions change.
• How do you eat an elephant…. probably the worst of a lot

With the guidance of your external advisor, do some research. The same way you will research those new WiFi Speakers or the new Electric Car. Buying into the right platform is extremely important. It is easy to paint yourself into a corner by buying cheap upfront. Penny wise, pound foolish. But, buy in chunks or modules or subscriptions; whatever lowest denominator the vendors offer. Software sales people have lot of options at their disposal when it comes to putting an offer forward. Never fall for the old volume discount, end of quarter or end of financial year discount story. They all do it. Yes, there may be some movement, but the right vendor will be a partner and will offer the best price any day of the year. Every day in software sales is an EOFYS.

Enough now of the ‘Buyer Beware’ points as it comes across quite negative. Next week we will get into the RFP process a bit more as promised last time and also some of the counter tactics to what software sales people put forward.

As always, feel free to comment, criticise or to ask a question.

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