FIVE MOST UNREALISTIC EXPECTATIONS OF AN ERP PROVIDER (CHANNEL PARTNER) (Part 2)
This is the second of a three part blog series in which we highlight what we feel are the most unrealistic expectations and beliefs of ERP buyers, ERP providers, and ERP publishers. We do this in order to shine some light on some of the most common weaknesses in our industry, so that they may be recognized and corrected or avoided. In this post we will focus on ERP Providers themselves.
1. “My new customer’s staff knows the importance of bringing the new system up quickly, and they will do their best to ensure the success of project.”
My experience is that many do and some don’t. There are always staff members who liked the old system and regret having to make a change, and there are other staff members who wanted a different system than the one they purchased. These staff members can slow any implementation down, and at worst, they will prevent you from making progress and possibly even sabotage your efforts. These are “On Board Terrorists”. You must determine who they are, and bring them to the management team’s attention. Here’s how to identify OBT’s:
- They are never available for training when you want them to be.
- They are always behind in getting information prepared for your conversion process.
- They are always complaining that the new system doesn’t perform exactly like the old one.
- They always seem to be worried about their own situation and needs, and not their company’s.
If you cannot turn them into supporters (you rarely can), then you must quickly marginalize them so that they don’t impede your progress. As soon as you suspect that neither is possible, then you must ask that they be replaced by someone who understands the value of what you’re doing.
2. “My new customer’s management team knows the importance of the success of this project, and will make all necessary resources available.”
Maybe, but they also appreciate the importance of staying in business. As I mentioned in another blog, implementing a new ERP system is a lot like removing the wings from a flying airplane, and getting the new ones installed before you hit the ground. Your customer must continue to operate and maintain their old system, while bringing up the new one, and for some period of time, they will run in parallel. The stress on their staff is huge, and your job is to do this in a way that doesn’t cause them to go out of business or lose key members of their staff in the process.
The bottom line is that your customer must continue to conduct their daily business activities with no loss of efficiency. They will always be hard-pressed to make the necessary resources available to you. You must work around their schedule, and anticipate that there may be periods of time, particularly around the end of the month or quarter, when their staff may be completely unavailable to you. You should build this into the implementation plan, and know in advance that it will affect your own manpower requirements, and even your cash flow.
3. “My prospect appreciates how much knowledge and experience I bring to the table and is unlikely to make a decision just based on price.”
To assume that this will always be the case is dangerously naïve. Many ERP buyers view ERP software as a commodity. To them, it’s sort of like buying an expensive car. Buy it from the dealer who has the lowest price, then have it serviced at the highest quality dealer, even if that’s not who you bought the car from.
They don’t understand that they are not really buying software. They are buying your knowledge, your experience, and your familiarity with their business processes. They believe that they can buy the software from the lowest-priced provider in order to save a few bucks, then have you (someone they trust) install it for them. They don’t appreciate the time and energy you invested in learning their business, and they certainly don’t want to compensate you for it. They don’t know how different their experience will be with the other guy, than it will be with you. They don’t fully appreciate how severely a bad implementation can affect their business.
It’s your job to let them know, and it’s your job to make them understand that if they buy the software from someone else, then they’re on their own. Let them know that you might be available to bail them out of a failed implementation, but it will be at twice your standard hourly rate. And if they still buy from the discounter, then you can view it as a future revenue opportunity.
4. “I can’t be bothered with C customers. I only work with A customers, and I get rid of the rest.”
I hear this sometimes, and I marvel that such a consultant can continue to stay in business. Wouldn’t it be great if all our customers did exactly what we asked them to, and paid us exactly what we thought we were worth, and viewed the value of our services exactly the way that we view it? You may find 5 companies out of 100 that will fit this profile, more or less. If you can stay in business, servicing only the needs of those 5 companies, then you must not have much overhead.
The most successful ERP providers are not the ones who just serve A customers. They serve everyone. They find a way to turn B’s into A’s and C’s into B’s. That takes a lot of work. It takes consistent communications, it takes some compromise, and it takes a documented process. I’m not saying that you shouldn’t have minimum standards of engagement, or that you shouldn’t enforce them. That’s always good business. I’m saying that if you set your bar too high, that you will likely always struggle to make as much money as you’d like.
Develop a menu of options, for A’s, B’s and C’s, and let them self-declare. Make sure that all those options are profitable for you, and if you find a customer who doesn’t like any of them, then it’s time to have a heart-to-heart talk with them. We have rarely fired a customer for anything but violations of our own ethical standards. Give them all the options, and if they don’t like any, they will fire themselves. When they return, they will be ready to do business in a way that’s profitable for you.
5. “We did a Detailed Needs Analysis (DNA) and I’m sure that no stones were left unturned.”
That’s unlikely. No matter how thorough your DNA is, you’re likely going to miss some esoteric nook or cranny of your new customer’s business processes. That is likely to be in an area of functionality of the old ERP system, and nobody brought it to your attention because they just assumed that the new system is a complete superset of the old one. You must anticipate this before contracts are signed, in order to properly set your customers’ expectations. Let them know that this can occur, and how the situation will be handled.
Some ERP providers think that this is a dangerous conversation to have with a buyer. I disagree. I believe that future A customers appreciate this type of honesty and recognize that quality rests in not being perfect, but in how problems are solved. Future C and D customers want to be indemnified from everybody’s mistakes, particularly their own, and it’s best that you find this out before you sign a contract.
See the DSD blog entitled “For the Best ERP Providers, Success is in Their DNA”.
Understanding these misconceptions will help ERP buyers and providers to make the best possible purchase and implementation decisions, and will result in a system that is most likely able to solve all key business issues and needs, on schedule and at a fair price.
About the Author
Doug Deane is President of DSD Business Systems, an international provider of on-demand (cloud) and on-premises ERP and CRM software, specializing in wholesale distribution, manufacturing, warehouse management, inventory, business intelligence and eCommerce software. DSD offers NetSuite Cloud ERP, NetSuite CRM, NetSuite eCommerce, Sage 100 ERP (formerly MAS 90), Sage 300 ERP (formerly Accpac), Sage 500 ERP (formerly MAS 500), Sage FAS, Sage HRMS (formerly Abra), Sage CRM, Sage SalesLogix, Sage Add-Ons (Extended Solutions), and Custom Programming. DSD has been a multi-time Sage President’s Circle award winner, a two-time Sage Gold Development Partner of the Year recipient, has been recognized by the San Diego Better Business Bureau (BBB) as a Torch Award Finalist (2009) and Torch Award Winner (2010) for Marketplace Ethics, and has been recognized by the Council of Better Business Bureaus as a 2012 International BBB Torch Award Finalist for Marketplace Excellence.