By Sam Graham
Here’s a hypothetical scenario. Your company has decided to implement a new ERP system, or perhaps even to target a digital transformation. You have formed a project team, which has clarified and documented requirements and has taken them to market via an ERP RFP (Request for Proposal).
The ERP software short-list
Having reviewed the responses, they have drawn up a shortlist; typically half a dozen for a Tier 3 but maybe only one for a Tier 1 ERP system. Either way, this is where expert independent ERP selection advice is essential.
At this stage companies expect presentations from the competing vendors, but both customers and vendors can have differing opinions on what these presentations are and what they should be. A presentation is only good if it addresses the customer’s needs rather than the vendors’ needs. But this can be difficult for customers to ensure because during a presentation, the vendor can be in the driving seat and has much more experience of the situation to leverage.
What to expect during ERP software demos
The customer will be expecting to see at least a proof of concept and maybe even a full demonstration so that the ERP Project Sponsor and the Steering Committee can feel comfortable about what will be a significant investment, but how realistic is that? If looking at simple systems at the bottom of Tier 3, that is certainly realistic. Such systems allow only basic configuration changes so, without extensive and expensive modifications (and such changes should never be attempted with Tier 3 systems), the customer will be seeing pretty much what they will be getting; albeit with just a subset of their data.
At the other extreme, Tier 1 ERP systems typically require months of set-up and configuration (and perhaps even bespoke modifications) to fit customer requirements. It is just not feasible for vendors to do this for a demonstration, so Tier 1 suppliers became, of necessity, masters of “demo by PowerPoint”. Many claim to have industry-specific implementation templates, but they don’t use these for demo purposes because they know that companies, even in the same industry, frequently have differing views on how they want to operate and that “ERP best practices” can be a chimera.
Evaluating ERP implementation capabilities
Customers, unless planning to use one of the large ERP system integrators such as Deloitte or Accenture (in which case they need to spend at least as much time selecting an implementation partner as they do software), also need to get a feel for the capabilities of the vendor’s implementation team. This might be possible when looking at small Tier 3 systems, but for Tier 1 systems and most of Tier 2s, it is not.
Vendors of these systems have specialist pre-sales teams whose job it is to make the system look good and it is unlikely that will see much, if anything, of these people after the contract has been signed. The most that customers can expect is to see a cross-section of the vendor’s implementation team and just how representative this cross section will be is open to speculation.
What to expect from your ERP vendor sales teams
So, what should the customer expect and demand from Tier 1 and Tier 2 ERP vendor sales teams?
Firstly, they need to see that the vendor has experience of working with companies of their size, in their industry and in their geographical operating areas. For example, if they have foreign subsidiaries that will be using the system, does the vendor have experience of working in those countries?
Secondly, customers need to see that the vendor understands their problems. The vendor, from reading the ITT/RFP and from follow-up clarification questions, should be able to identify the key pain points and be able to demonstrate how these issues can be addressed. It goes without saying that all claims must be confirmed in writing – whether demonstrated or not.
Vendors are trying to impress prospective customers so will usually show impressive client lists. Though it may be interesting that they have Boeing or Airbus as a client, is that of any real relevance to a mid-size manufacturer of, say, furniture? Likewise, they may claim wonderful functionality and display a clear ‘road map’ of future developments, but the customer needs to understand that nothing exists, or is guaranteed to exist in the future, unless the vendor puts the promise in writing.
ERP vendor sales reps vs. your own team
Companies may feel relaxed and in control because the presentation is taking place on their turf, but they need to understand that they will be dealing with very experienced sales people who have many years of experience phrasing things in a way that will be attractive to prospective customers.
Professional salespeople will not typically lie, but they are there to sell and will be trying hard to give positive answers. That can lead them to answer ‘yes’ to a question when the proper answer is ‘yes; but…’ So, the presence of good independent ERP consultants at the presentation greatly reduces the risk of questions being “interpreted advantageously” and, indeed, of genuine misunderstandings.
Companies do not buy big systems often, but they will be buying them from people who sell them often: who do you think has the advantage? They shouldn’t go into the jungle without a guide. More advice on how to ask questions and how to interpret answers will be offered in a future blog.