“SoftSelect was a great partner throughout the process of choosing an ERP solution. They helped us control the terms throughout the ERP buying process, and we achieved impressive results in reduced ERP license fees. Having an experienced partner like SoftSelect, helped us negotiate for the products we need and set our expectations for the process of implementing these solutions.”
Nate White, COO, Provocraft
ERP Cost Control
“Negotiating ERP costs is complicated and the ERP software vendors take advantage of the buyer's lack of experience. SoftSelect's experience and influence helped us level the playing field. We clearly saved money and lowered our long term risk.”
Jeff Markham, President,
Cornell Pump
We have extensive experience in controlling the cost and terms for buying ERP software. For our clients this typically results in (1) large savings and (2) better control in the life of the business relationship over what is otherwise arranged when buyers are unaware of their options.
Key ERP cost control objectives are to:
Lower costs: Arrange initial and ongoing costs for ERP licenses and maintenance that are far below normal amounts paid (usually 40% or more). It is important to note that reduced costs are highly influenced by favorably defining (1) what functions are included in ERP, and (2) rights of various user licenses.
Control purchase terms, lower risk, and preserve cash: Establish purchase terms that enable your company to buy licenses when they are needed and at a predicable cost. This is contrasted to most ERP purchases in which the buyer pays for all or most licenses up-front. These normal purchase terms have many negative ramifications to the buyer and are completely unnecessary when purchasing a product, such as software, that has no incremental cost to release the next copy.
“Long term ERP license costs were initially very difficult to calculate. Working with SoftSelect we were able to insist on a predicable ERP license fee approach and achieve much lower initial and ongoing license fee costs.”
Paul Castle, ERP Project Manager, Leupold & Stevens
Control ongoing costs (maintenance fees): Arrange maintenance fees that are competitive, tied to performance (when software is installed and not just purchased), and that do not contain problematic escalation terms.
Fully understand costs—no surprises: Understand software and other IP costs to greatly reduce unclear or hidden costs that can surface later. This includes a review for contract language that is always heavily one-sided in the software vendor’s favor.
Before interaction with candidate software vendors we educate your team on the ERP costs and terms that can be achieved and what tactics or arguments you may hear from candidate software vendors. This coaching builds useful resilience and confidence on this topic for the selection team and executive sponsors.
Click here to download white paper on controlling ERP cost.
Contact Engleman Associates directly for further information on:
- ERP budget suggestions
- ERP budget tools
- ERP cost information—what should ERP cost?