Whether you’re a SMB selecting your first ERP package or a seasoned company upgrading your business to a new ERP solution, an ERP solution allows the company to take advantage of an integrated process management. To help select the correct solution for your company here are a few tips to painlessly reach agreement on price and service levels with your ERP vendor or reseller.
1. Understand the Real Value of Your ERP installation
Many first time purchasers get so hung up on line item discounts and petty debates that they can delay negotiations for months. Likewise, some companies think that ERP implementations take so long anyway that extending negotiations has no impact on the business. Many modern ERP vendors have worked on reducing the time of implementation of their solutions and you can hire an Information Technology Strategic Consulting firm, such as Star Base, Inc., to manage the implementation. Outside project management and business analysis services can prove useful in reducing the time it takes to move a business organization from its current state of business processes to the new ERP integrated business processes. So businesses need to know when it is beneficial to let go of demands for discounts that only affect short term financing in lieu of long-term benefits.
2. Time Your ERP Negotiations
Time your negotiations with the vendor or reseller so that implementation and cut over can happen for your business so that you can start the new quarter or fiscal year on the new ERP solution. Like any business, ERP vendors may be willing to give greater discounts if you offer to close the deal by end of the quarter or end of year as they are under pressure to meet their sales goals.
3. Get Outside Advice on Your ERP Contract
Just as successful companies look for outside advice on legal, project management and CRM features, you should consider outside advice on your ERP solution. Besides legal advice, IT Strategic Consulting firms with expertise in ERP solutions, analysis and negotiation can provide invaluable value to selecting the correct solution for your business. Asking for feedback from a vendor’s other customers can raise important issues or benefits. Some vendors publish customer lists on their websites so that you can collect unbiased feedback from their customers. When an ERP vendor or reseller makes it easy to contact their customers, you can expect a smooth negotiation.
4. Expect some Legal Terminology in the Contract
Your negotiations with the vendor or reseller may have been warm and friendly but when the contract containing cold, hard, impersonal legal jargon comes across the table can give business negotiators that uneasy feeling. Don’t take this personally, standard contracts are not aimed at individual businesses; but rather take this opportunity to ask questions about the intent behind troublesome clauses. By all means, cross out and re-work unclear and unwanted clauses.
5. Think Long Term
Remember that ERP solutions include a certain level of support from the vendor or reseller. So you are negotiation a long-term relationship or partnership with the vendor or reseller, not just a software package. Some vendors will negotiate deeper discounts in exchange for referrals. Do take care of the package features and short-term goals and financing, but not at the expense of the long-term relationship you are forging.
6. Agree on Success Measurement
Many contract disputes between businesses and vendors revolve around performance, speed, uptime and other measurable factors. So agree with the vendor on what metrics will be measured and indicate success. By agreeing on factors that will trigger escalation and other service responses you can prevent future frustrations.
7. Specify Training on Integrated Solutions
Since this process involves moving your entire business organization from what they are use to doing to a new integrated business process, training of all or key individuals within your organization will be instrumental in the implementation process and ongoing operation of the solution. The contract should lay out which individuals within your organizations will receive training on what aspects of the ERP package. This will give the business “power users” that will assist in the implementation process as well as be able to handle issues in-house before having to call on support. Selecting a vendor that has put great effort into training, including on-line and classroom training, will be beneficial to your organization.
8. Clarify Your ERP Vendor’s Definition of “Emergency”
Since your ERP contract will define acceptable levels of service from the vendor, use the negotiation process to set thresholds of emergency response. Envision everything that could go wrong, even your worst nightmare, and set response time expectations with the vendor. Even scenarios that have nothing to do with the software itself, if a tornado demolishes your building, you have a lot more than your ERP package to think about, but how will the ERP vendor assist you in getting your business back up and running. Your ERP vendor can be a great asset in your overall company disaster recovery plans.
9. Shield Yourself Against Market Fluctuations
The average ERP solution stays in place for about two decades. Will your new ERP partner be in business twenty years from now? Adding language in the contract to protect from the vendor going out of business or merging with other entities can prevent your system from falling into disrepair.
10. Treat Your ERP Vendor Like You Want To Be Treated
Tense negotiations often lead to an adversarial relationship. Even if negotiations were tense at times, treat your new EFP vendor as a partner in your company’s success. Communicate clearly and openly your needs, your budget and your challenges are often the best way to reach a “win-win” solution.
In business as in life, first impressions mean a lot. Devoting some time and energy into preparing for the negotiation process prior to meeting your ERP vendor can lead to lasting satisfaction long after the negotiation process.
1. Understand the Real Value of Your ERP installation
Many first time purchasers get so hung up on line item discounts and petty debates that they can delay negotiations for months. Likewise, some companies think that ERP implementations take so long anyway that extending negotiations has no impact on the business. Many modern ERP vendors have worked on reducing the time of implementation of their solutions and you can hire an Information Technology Strategic Consulting firm, such as Star Base, Inc., to manage the implementation. Outside project management and business analysis services can prove useful in reducing the time it takes to move a business organization from its current state of business processes to the new ERP integrated business processes. So businesses need to know when it is beneficial to let go of demands for discounts that only affect short term financing in lieu of long-term benefits.
2. Time Your ERP Negotiations
Time your negotiations with the vendor or reseller so that implementation and cut over can happen for your business so that you can start the new quarter or fiscal year on the new ERP solution. Like any business, ERP vendors may be willing to give greater discounts if you offer to close the deal by end of the quarter or end of year as they are under pressure to meet their sales goals.
3. Get Outside Advice on Your ERP Contract
Just as successful companies look for outside advice on legal, project management and CRM features, you should consider outside advice on your ERP solution. Besides legal advice, IT Strategic Consulting firms with expertise in ERP solutions, analysis and negotiation can provide invaluable value to selecting the correct solution for your business. Asking for feedback from a vendor’s other customers can raise important issues or benefits. Some vendors publish customer lists on their websites so that you can collect unbiased feedback from their customers. When an ERP vendor or reseller makes it easy to contact their customers, you can expect a smooth negotiation.
4. Expect some Legal Terminology in the Contract
Your negotiations with the vendor or reseller may have been warm and friendly but when the contract containing cold, hard, impersonal legal jargon comes across the table can give business negotiators that uneasy feeling. Don’t take this personally, standard contracts are not aimed at individual businesses; but rather take this opportunity to ask questions about the intent behind troublesome clauses. By all means, cross out and re-work unclear and unwanted clauses.
5. Think Long Term
Remember that ERP solutions include a certain level of support from the vendor or reseller. So you are negotiation a long-term relationship or partnership with the vendor or reseller, not just a software package. Some vendors will negotiate deeper discounts in exchange for referrals. Do take care of the package features and short-term goals and financing, but not at the expense of the long-term relationship you are forging.
6. Agree on Success Measurement
Many contract disputes between businesses and vendors revolve around performance, speed, uptime and other measurable factors. So agree with the vendor on what metrics will be measured and indicate success. By agreeing on factors that will trigger escalation and other service responses you can prevent future frustrations.
7. Specify Training on Integrated Solutions
Since this process involves moving your entire business organization from what they are use to doing to a new integrated business process, training of all or key individuals within your organization will be instrumental in the implementation process and ongoing operation of the solution. The contract should lay out which individuals within your organizations will receive training on what aspects of the ERP package. This will give the business “power users” that will assist in the implementation process as well as be able to handle issues in-house before having to call on support. Selecting a vendor that has put great effort into training, including on-line and classroom training, will be beneficial to your organization.
8. Clarify Your ERP Vendor’s Definition of “Emergency”
Since your ERP contract will define acceptable levels of service from the vendor, use the negotiation process to set thresholds of emergency response. Envision everything that could go wrong, even your worst nightmare, and set response time expectations with the vendor. Even scenarios that have nothing to do with the software itself, if a tornado demolishes your building, you have a lot more than your ERP package to think about, but how will the ERP vendor assist you in getting your business back up and running. Your ERP vendor can be a great asset in your overall company disaster recovery plans.
9. Shield Yourself Against Market Fluctuations
The average ERP solution stays in place for about two decades. Will your new ERP partner be in business twenty years from now? Adding language in the contract to protect from the vendor going out of business or merging with other entities can prevent your system from falling into disrepair.
10. Treat Your ERP Vendor Like You Want To Be Treated
Tense negotiations often lead to an adversarial relationship. Even if negotiations were tense at times, treat your new EFP vendor as a partner in your company’s success. Communicate clearly and openly your needs, your budget and your challenges are often the best way to reach a “win-win” solution.
In business as in life, first impressions mean a lot. Devoting some time and energy into preparing for the negotiation process prior to meeting your ERP vendor can lead to lasting satisfaction long after the negotiation process.
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