ERP Service Contracts – Do’s and Dont’s

The Situation

Over the last couple of years, companies hit with down revenues and have a ERP or CRM system version that is old enough that it’s not longer supported, have made the decision to cancel maintenance and support until they are ready to upgrade.

I mean if your software is no longer being supported and your not going to upgrade anytime soon WHY IN THE WORLD  would you be paying thousands of dollars a year. If that’s your situation – CANCEL IT now…

The ONLY caveat I will make is that some ERP and CRM companies will threaten you.. “OK Mr or Mrs Customer, if you cancel, WHEN you renew your maintenance and support, we are going to not only hit you with a penalty, but will charge you ALL support fees that were unpaid!!!

I only have one thing to say about this… Bull S__t!.

Don’t take it…

I didn’t.  I negotiated a deal where I would cancel for one year and then renew without any penalties or back charges.

Then, dig this… I am just re upping tomorrow and it’s been 20 months (it took me a while to get the OK) AND they are more than happy to give me the SAME DEAL.

You know why?

I think you do… A lot of people have canceled and M and S revenues are WAY down!

Any here’s a little tip on when you do re up. They might tell you that they are going to give you a GREAT deal and not charge you in arrears BUT you are going to have to agree to stay on contract for 3 years and pay the first year UP FRONT.

DON’T AGREE to this. I didn’t. I negotiated and am paying quarterly. There’s a 2% surcharge, but that’s well worth it.

So in summary, don’t pay when there is not value, start paying when there is and negotiate from the beginning to the end…

Until next time ….

Rick
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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