Select an ERP System – a free series to guide you. 5 – Saving money and how to pay for it.
This is part 5 of a series of blogs designed to help you choose and implement a new ERP system.
In this blog, we look at how you can save money on the system but also warn you why potential suppliers might choose to walk away. Previous blogs covered the selection process, ballpark costs implementation and basic checks and are available at our blog page.
Once have chosen your solution, when you buy that solution can have an impact on the price you pay. It’s important at this stage to understand the psychology of the ERP vendor. I don’t mean the reseller here, I mean the company behind the software. Whether you’re SAP, Microsoft or Sage, the name of the game is sites – the more the better!
This is because the first year value of the sale pales into insignificance against the ongoing revenues that can be generated from updates e.g. more users being added, updates to the software and, most importantly, annual support revenues. So, the supplier will regularly offer incentives to potential customers to buy the licence but generally never offer a discount on the ongoing support charges. When is this most likely to happen? As you might find in any retail environment, as the end of a quarter, half year or at the company’s year end. So, if nobody offers you a deal, ask!
Other reasons for suppliers offering delas might be because you are a charity or because the competition on a particular deal happen to be viewed as someone they particularly want to target.
Most ERP resellers can access finance for you and most like to do so, for two reasons. The obvious one is to ensure that lack of money doesn’t stop the project proceeding. The second is that the finance company will check out the customer’s creditworthiness and will quickly advise the reseller if the potential customer has money problems. The reseller can then avoid wasting time on a project doomed to failure.
Finally, don’t forget that many local business gateways or enterprise companies can offer support in the form of grants for the training, consulting and/or development costs associated with the project. The main criteria here will be the extent to which staff will be retained or more staff employed; or that the system will allow the business to sell more products outwith its current geographical area. And, speaking to these funders is another excellent way of confirming whether your potential supplier has a history of delivering cost-benefits to its customers.