Hiring an ERP Implementer: Critical Insights

Challenges in Estimating ERP Implementation Costs

Based on our experience across hundreds of projects, accurately estimating ERP implementation costs is practically impossible. This is due to the highly variable conditions of the buyer, the implementer, and the overall project, which cannot be fully assessed during the estimation process.

For the buying company, factors that significantly impact project costs, timelines, and outcomes include:

• Business Process Complexity: The intricacy of current and future processes.
• Process Maturity: The level of coordination and readiness across departments.
• Change Management Skills: Clarity on future-state processes and the ability to manage change effectively.
• Internal Team Capabilities: The skill and capacity of the team supporting the project.
• Executive Leadership: The commitment and ability to lead and protect the project's integrity.
• Scope Control: The discipline to manage project scope during the initial implementation.
• External Demands: Typical and unforeseen business pressures outside the ERP project.

For example, a highly prepared company with skilled implementers might require X consulting hours to achieve excellent results. In contrast, an unprepared company might need 2X hours or more, potentially ending with a failed project—even with the same implementer.

Given these complexities, implementation cost estimates are often optimistic "wishful thinking" designed to win the sale. At Engleman Associates, we do not rely on implementers' quotes or detailed Statements of Work (SOWs) to influence ERP or implementer selection.

How to Control ERP Implementation Costs, Timelines, and Outcomes

The EAI-SoftSelect implementer selection process prioritizes factors that genuinely influence project success:

1. Assembling the Right Team:  Ensure the implementation team has the appropriate experience, skills, and capacity for the project.
2. Fixing Implementation Contracts:  Standard service contracts are often biased in favor of the provider. Our contract experts review and adjust agreements to ensure balanced terms, addressing one-sided language and ensuring protections for the buyer.
3. Establishing Reasonable Hourly Rates:  Set distinct, fixed hourly rates for each role on the implementation team, valid through the go-live phase. Avoid blended rates, which can obscure costs and resource value.
4. Remote Service Delivery Opportunity:  After a well-executed initial business process design stage, many tasks can be effectively executed remotely. Remote work reduces travel costs and demands while maintaining efficiency, provided the project is well-managed, with clear tasks, dependencies, and minimal drama.

By focusing on these strategies, the EAI-SoftSelect process helps control costs, manage timelines, and improve overall implementation outcomes. Contact us to discuss how we can support your ERP implementation success.