ERP Software Cost Control
We have extensive experience in controlling the cost and terms for buying ERP packages. When compared to typical results our clients achieve (1) large initial ERP cost savings, (2) Lower life cycle ERP costs, and (3) better control in the life of the business relationship.
Key ERP Package cost control objectives are:
Lower costs: Arrange initial and ongoing costs for ERP application 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 programs, and (2) rights of various ERP user licenses.
Control purchase terms, lower risk, and preserve cash: Establish ERP program purchase terms that enable your company to buy the various ERP licenses when they are needed and at a predicable cost. This is contrasted to how most ERP packages are 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 ERP software, that has no incremental cost to release the next copy.
Control ongoing ERP costs: Arrange ERP subscriptions or maintenance fees that are competitive and that do not contain favorable cost escalation control terms. Further contain the insidious effects of certain contract language that affects the ERP usage rights and costs of ERP packages over time.
Before interaction with candidate ERP software vendors we educate your team on what ERP should cost and what tactics or arguments you may hear from candidate software vendors. This coaching builds useful resilience and confidence on this topic for the ERP selection team and executive sponsors.
Contact Engleman Associates directly for further information on:
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.
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.
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.