WSJ – Companies Are Spending On Software (ERP)

Hi there

This article in the WSJ today highlights that companies are starting to spend on equipment and software – Firms Spend More –  Carefully…
Sorry it’s just a summary (Subscription to read the whole thing)

This is good news for those of us that need to upgrade our aging systems. It appears that organizations are realizing that their equipment and systems are aging and now is the time to make some changes.

This is BAD news for those that get the go ahead due to the fact that vendors are not as motivated to give you the deal of the decade… that was two years ago… It told you so…

At any rate, if you can get the “green light”, do it while you can and ASK FOR THE MOON… If you don’t ask for more for less – you definitely WILL NOT get it. My #### 1 rule in negotiation…

Until next time…

Rick

The Seven Steps to Implementing ERP – Step 3 – Purchasing

OK, so far we have covered…

Step 1 – You have Justified and Specified your ERP system – people are going to "have your back" if something goes wrong (and it will!).

Step 2 – You have Sourced, Qualified and Selected an ERP software package that is going to work for your business.

Now for Step 3 – Negotiating and Purchasing your ERP system…

I can say without reservation that negotiating and purchasing an ERP system is just about as complicated as a purchasing transaction can get. While you might have extensive experience buying capital equipment, few other purchases will have as many angles as an ERP system.

First, you have the software, OK, not a big surprise, then the hardware to run it … again not a shocker, then the network backbone upgrades, then come the consultants from perhaps 1, but more likely 2 or 3 different firms, then the maintenance and support, the internal personnel that you have to keep working on the project….

So there is a list of the major aspects to the purchase. Now negotiate the best price and terms for each one of them! This is not a cookie cutter deal. The sales people that you are working with, while they are probably ethical, are going to answer your questions, and you should be asking lots of them, are not going to volunteer everything that they know about the deal…

What do I mean by that, well let me give you an example… Let’s say that you are buying the Quality module that is offered by the ERP supplier, and you know that the Quality module" consists of 15 key applications. However, the quoted package only includes "Quality module essentials", which means that you are only getting 5 out of the 15 apps. Don’t laugh, this has happened to me and yes I did catch it before I bought a package… but this kind of stuff can happen all over the place.

So bottom line – Caveat Emptor (Buyer Beware). I think you get the idea. Next … Step 4, Installation and Configuration…

Until next time… Rick

The Seven Steps to Implementing ERP – Step 2 – Sourcing

So now on the Step 2 in the ERP Implementation Process.

Recall that in Step 1 you thoroughly Justified and Specified your new system. With that out of the way you are confident that you will have the support that you need and know what target you are aiming at.

In Step 2 of the implementation process – Sourcing the right ERP system, you are looking at as many packages as you can, narrowing the field and then qualifying and selecting a specific package from the narrowed field. Piece of cake right? …. Wrong! So many "experts" are out there, and every one of them has a bias towards one package or another…. Salesman, Consultant, it does not really matter, they have expertise in one or more specific products…

So you read the trade journals, you spend time in the forums, you Google "ERP", you read the propagan…. sorry "literature" and start making your list, checking it twice. Then once that list is made, you have to start eliminating those packages that don’t meet your requirements and finally selecting one that comes as close to meeting them as possible.

So this is Step 2 and a VERY CRITICAL one in the successful implementation of an ERP system… Next – the 3rd Step in the implementation process …. Purchasing your system…If finding the right system sounds like fun… wait til you get my opionion on the Purchasing process…

Rick