Hiring an ERP Implementer
It has been our repeated observation (over hundreds of projects) that it is not possible to know, with much precision, how much implementation consulting services will be needed by a company implementing enterprise software. In general, this is because of the varying statuses of companies that will be implementing and using new enterprise software and status of the selected implementer.
Related to the buying company’s status, the project cost and time duration of the implementation effort will be more or less time based on:
- Complexity of the company's processes
- Current status of processes and company coordination between process areas
- Clarity of future-state process objectives (or typically lack of clarity)
- Overall skill and capacity of the internal team supporting the project
- Executive commitment and skill to lead the project
- Quantity of business process objectives planned for the initial implementation
- Other demands on the company implementing new enterprise software
For example: If a company (that will be using new ERP) is highly prepared, the skilled implementer may require 800 consulting hours to reach exceptional results. If the same company is largely unprepared, it may take 1600 consulting hours (twice the resources) to reach a point to finally terminate the project—this is even with a skilled and experienced implementer.
Based on all these factors, no candidate implementer can be certain about the implementation effort needed for a particular company. In reality, they have very little certainty in general. NOTE: It should be presumed that any presentation of Implementation Costs and Approach from an implementer is a sales presentation intending to impress the potential buyer and likely a 'wishful thinking' cost scenario. In other words there is nothing that can be said or documented at the point before an implementation starts (words, proposals, contracts, etc.) that will accurately reflect the actual effort needed.
For this reason the SoftSelect process does not use implementation quotes or soft representations from implementers to influence business software selections or selection of an implementer for a particular business software. The SoftSelect process also does not use as a selection influencer the candidate implementer’s detailed Statement of Work (SOW) documents as they can only be a very general and inherently inaccurate estimates based on the factors listed above.
What Actually Helps Control Costs, Calendar Time, and Results
The SoftSelect ERP selection process considers the following items as influential in choosing the ERP implementer:
- Right team: Locating proper experience, skill and capacity of the key implementer consultants which has a direct tie to project achievement and lower costs to reach this achievement.
- Implementation contracts fixed: Default commercial terms offered are nearly always one sided in favor of the service provider. A SoftSelect services contract expert will review and adjust service provider contracts using a checklist of objectives as well as fixing problems with existing contract language. This is a process that is not really ‘negotiating’ but instead a process that is endeavoring to fix these one-sided documents.
- Hourly rates: Effective hourly billing rates for implementer’s personnel that are fixed from the start of the major implementation effort to a point in which the new enterprise software is comprehensively implemented (typically 8 to 18 months). Obtain hourly rates for the different resources contemplated to be applied to the implementation project and not a blended rate.
- Remote service delivery: Use of effective and forward-thinking mechanisms for remote service delivery resulting in easier achievement of many specific duties (e.g. activity that require a few hours at a specific time) and lower travel costs.
- Staffing options: Having clear options ready for sourcing other independent consultants for a particular purpose if the original implementer is not effectively filling the need.
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.
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.
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.