Events I How to Select ERP Before You Buy

How to Uncover the Truth About ERP Before You Buy

Speakers

Andy Pratico, Brett Austin, MBA

May 10, 2024 - 9:00 am (Pacific Time)

This popular web workshop is scheduled for May 10, 2024 (09:00 am PDT). Let's kick off 2024 on a positive note by clicking on Register Webinar and reserving your spot.

According to The Wall Street Journal, 73.8% of companies are not happy with their current ERP. As sales demos are usually a few hours, yet it takes a few years to become ERP fluent, the incorrect assumptions from watching sales demos are no surprise. In fact, sales demos exacerbate the negative opinions we all hear about ERPs.

Maybe it is time to consider another method when evaluating these systems? How about using some Common Sense?

Combined over 6 decades in the industry, Andy’s and Brett’s advice will guide you to uncover the truth about ERPs before you buy. Isn’t uncovering the truth exactly what we are trying to do when evaluating these systems?

You are also welcome to schedule a review of popular ERPs (objective customer opinions on 36 popular ERPs).

Making the decision to invest in an Enterprise Resource Planning (ERP) system is among the most challenging and intricate choices a company can face. Assessing hundreds of thousands of features and processes essential for the seamless functioning of any ERP system to qualify as a success represents a formidable, if not insurmountable, task. Interestingly, data from reputable sources such as the Wall Street Journal indicate that a significant portion, specifically 73.8%, of executives using ERP express dissatisfaction with their current systems. This dissatisfaction extends further as 83.8% of ERP adopters, according to the Standish Group, exceed their initial budgetary allocations and only manage to implement a fraction of the intended functionality, with some never achieving a "Go Live" stage or utilizing the ERP they initially invested in.

An area of potential learning lies in the experiences of second-time ERP buyers, who may offer insights into successfully evaluating and implementing ERP systems. With a three out of four dissatisfaction rate and a tendency to overspend, the question arises as to the rationale behind pursuing ERP investments.

Delving deeper into this matter, a Deloitte study highlights a shift in priorities between first-time and second-time ERP buyers. While price dominated the concerns of initial buyers, subsequent buyers prioritize the level of reseller support. This change in emphasis sheds light on crucial aspects of ERP acquisition.

The price of an ERP system encompasses both the software cost and the implementation and support costs from the reseller. Initial buyers often view ERP systems as commodities, assuming that all options offer similar features, or even an excess of what they require. Consequently, evaluations predominantly focus on functionalities, with the fatal flaw being the subsequent assumption that implementation costs mirror software ease-of-use and vendor expertise.

Industry standards reveal that the ratio of Software Price to Implementation Price averages 1:2, indicating that, on average, for every dollar spent on software, two dollars are allocated to its implementation. This statistic underscores the importance of reseller support, particularly for those who find themselves overshooting their budget. Furthermore, the average implementation duration of 6-9 months, or longer for more intricate setups, exacerbates the issue as overspending becomes apparent only after several months into the project.

In conclusion, the complex nature of ERP investments necessitates a holistic approach that not only considers software functionalities but also places significant emphasis on reseller support, implementation costs, and realistic timelines to avoid budgetary overruns and dissatisfaction among executives.