“A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns from him how to avoid the mistake altogether.”
Investing in a new ERP solution is a big decision, and we know you want to get it right. There’s lots to consider and much on the line, so getting some advice from others who’ve been through the process recently can be helpful. As we work with companies making the transition to a new business management solution, we often hear a bit of buyer’s remorse based on their previous experiences. You know, the “wish I knew that going in” or “if we had only known” statements. To help others avoid the most common mistakes, we thought we’d share these five tips we’ve learned from our clients on how to select the right ERP system:
- Don’t buy direct
Some ERP vendors sell directly to customers. Others sell exclusively through partners. Still, others have a hybrid approach. We hear from companies that “going direct” seemed like the best option — skip the “middleman,” right? Wrong.
ERP vendors are in the business of getting you sold and implemented quickly so they can move on. Unless you’re an utterly vanilla company, this type of cookie-cutter implementation won’t allow you to optimize the value hidden in the ERP. We are routinely engaged by clients that purchased directly and now consider it a mistake. Working with an experienced partner, they tell us, unlocks a lot of value, and speeds the solution’s return on investment.
- Maybe skip the ERP consultant
In an earlier post, we tried the answer the question, “Should we hire an ERP consultant?” If you haven’t yet read the article — spoiler alert — the answer is, probably not. For the majority of ERP buyers, ERP consultants don’t actually help you select the right ERP system but instead add an additional layer of overhead, cost, and complexity that’s just not necessary.
- Understand what you’re really buying
ERP vendors are well known for being mysterious when it comes to what you get for the price you’re paying. Often, they bundle features together and charge a premium for the bundle. You don’t need everything in that bundle, but to get the one function you want, the bundle is the only way to get it. Some ERP vendors have a reputation for inflating licensing fees significantly after the first year or two. Others try to convince you to buy functionality now, just in case you need it down the road.
In short, it’s often difficult to fully understand what’s included in the price the ERP vendor is charging. A partner can help you parse through the details to ensure you’re paying for what you need now, and nothing more.
- Fuhgeddabout features
Forget about features — really? Yes. Modern, cloud-based financial management solutions all have surprisingly similar feature sets so your comparison checklists will tick a lot of boxes in every column. Beyond that, we’d argue that you shouldn’t shop by features. Instead, ask yourself what you expect to be able to do with your next solution. What does the end game look like? What business processes will see improvement? What workflows will be automated? Then ask the business partners representing each solution (not the vendor, see #1) to walk you through how they can help you make that vision a reality.
- Find a long-term partner
In our experience in the ERP space, we see two types of ERP resellers. There are the sales-driven organizations that focus most of their resources on selling new user licenses. Then there are the service-driven firms that focus on building long-term relationships with customers. Sales-driven organizations are good at what they do, and they move a lot of product. They have to, since when the focus is the sale, sometimes customers’ needs take a backseat. As a result, those disgruntled customers go looking for a new partner, one that prioritizes service. Often, their search leads them to us.
Buyer’s remorse can be painful, especially when the purchase is as substantial as a new ERP or financial management solution. It’s wise to listen and learn from the mistakes other buyers have made as you work through how to select the right ERP system for your company. If we can be of help in that process, don’t hesitate to reach out to a member of our consulting team.