How to Gain Independence From Your ERP Software Vendor

FlagWith the Fourth of July holiday literally right around the corner, many of us in the United States are giving extra thought to the freedom and independence we are so lucky to have both personally and as business owners. But for those of us looking to purchase ERP software, in negotiations with an ERP vendor, or already locked into an ERP contract, that liberty might be beginning to show its constraints.

Depending on where you are in your ERP project, “gaining independence” from your ERP software vendor may have differing definitions. Some tips to take back control, broken down by project phase, include:

Choosing an ERP Vendor: The best and most obvious way to start an ERP software selection project is to use an independent third-party ERP consulting firm to help guide the way. The not-so-secret secret about most consulting companies in the market is that they’re aligned with one or more ERP software vendors and receive some sort of compensation when one of their clients chooses a vendor with whom they’re partnered. The beauty of Panorama is that we pioneered the vision of acting as a fully independent ERP software advisor to our clients. We don’t receive any kickbacks from the vendors, so our advice is completely authentic to each client’s needs and bottom line rather than our own. Make sure your consulting partner can say the same. Learn more about how to gauge true independence and expertise by accessing our Checklist for Choosing an ERP Implementation Partner.

Negotiating With an ERP Vendor: Once your organization has chosen the right ERP system, it’s time to start the process of negotiating for the optimal price and services. The best way to maintain independence at this stage is to err on the side of less licenses (remember that it’s much easier to add additional licenses than to remove extraneous ones), lock in a price for additional licenses in the future, and take the time to detail exactly what and when the vendor will provide and what the total cost of ownership will be over several years. The last thing your organization wants is to be locked into some contract that isn’t suitable with far too many licenses than what it truly needs. Again, this is a time when third-party insight is critical. Read more in my Tips for Contract Negotiations With ERP Vendors blog post.

After the Contract is Signed: It’s understandably much more difficult to “gain independence” after the ERP contract has been signed. Many organizations at this point can get understandably upset once they realize how much control over their own data, processes and operational viability they have “surrendered” to their ERP vendor. If your organization is unhappy with its ongoing maintenance agreement with its software provider, now is the time to start researching third-party support and maintenance organizations. Even if your organization decides to stick with the vendor, knowing the options on the market can certainly act as a point of leverage during future negotiations and serve to give the C-suite more confidence in its freedom to choose a new path. Learn more by reading Shifting ERP System Maintenance to a Third-party Support Provider.

Freedom in how we live our lives and how we run our businesses are rights for which many have died fighting. While ERP implementations quite obviously aren’t worth the ultimate sacrifice, they also aren’t worth giving up control over all you and your employees have worked to build. Over this holiday, I’ll be celebrating my and my loved one’s personal freedom as well as the freedom Panorama has to conduct business in the way we see fit and correct. It is my hope that you are allowed the same celebration.

Read more about our philosophy in We Stand for Freedom: An ERP Consulting Firm’s Declaration of Independence.

Written by Eric Kimberling

After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema, Eric realized the need for an independent consulting firm that really understands ERP. He began his career as an ERP organizational change management consultant and eventually broadened his background to include implementation project management and software selection. Eric’s background includes extensive ERP software selection, ERP organizational change and ERP implementation project management experience. Throughout his career, Eric has helped dozens of high-profile and global companies with their ERP selections and implementations, including Kodak, Samsonite, Coors, Duke Energy and Lucent Technologies. In addition to his extensive ERP experience, Eric has also helped clients with business process reengineering, merger and acquisition integration, strategic planning and Six Sigma initiatives. Eric holds an MBA from Daniels College of Business at the University of Denver.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>