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

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