5 Tricks to Keeping ERP Costs Down - ERP Cloud Blog
 
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Robert Jolliffe, Sabre Limited

5 Tricks to Keeping ERP Costs Down


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If you read my previous blog (Why ERP Implementation Costs are so Wrong) you will have read my take on ERP implementation Cost (especially with Manufacturing ERP) overruns. To borrow from Bill Clinton, “It’s the process, stupid!”

So how do you, as a customer go about fixing this problem?

You can’t really dictate the process.  The process your ERP Partner (such as Sabre Limited) will follow is based on what they have confidence and experience with.  Trying to bend their process to your approach is a bad idea.  The best bet, is find a partner that already follows an approach that will work for you.  Here are some things to watch out for:

1. Avoid the “Everything is Easy” Sales Pitch

If you have gone through an ERP sales pitch, and absolutely everything you’ve asked for is “easy” and won’t be a problem, be wary.  I have almost never gone through a sales cycle where there were ZERO risks.  If the salesperson makes it sound a little too good to be true … it probably is.

2. Check the Team’s references

When you start implementing, you will be assigned a consulting team that will basically run your project. When you check references, you may call 3 or 4 companies that used 3 or 4 different teams. You’re not going to get a sense of the repeatability of your Partner’s process if every reference used completely different people. Ask for references that used the same team they propose you will use.

3. Get a Transparent Estimate

The estimate you get for your training and implementation should itemize all the modules and functions you will be trained in. This itemization should include the list of reports of forms that will be included. It should itemize the estimated hours of training. Almost more important, it should list the excluded items!

4. Do They have Skin in the Game?

Does the partner you have chosen have any kind of incentive or reason to achieve the estimate they have provided? Is there a penalty for exceeding their estimated hours? Do they have a rate adjustment? Is there a bonus for being on-time and on-budget?

5. How do they Implement

And this is the most important part. How do they implement the ERP? Do they follow the old “we train you so you can set up the system” or do they use an approach of “we will set up the system based on our understanding of your industry and best practices?” If the former, you need to be sure your staff have extensive (8-10) ERP implementation projects under their belt so they understand the risks. If the latter, then be sure part of the process involves your staff testing their setup and assumptions - and be prepared to do some tweaking.

Sabre's Approach

At Sabre we’ve radically changed the way we do ERP implementations. We did this because the boss (that is, me) decided that we owed it to customers to put our money where our mouth is.  We added a clause to our quotes in which we take a hit if we miss our estimates and targets, and we stick to it.

This has made us a better ERP Partner, because now we have a real motivation to stay on budget.  Our Project Management and our process is improved.  We hold ourselves and more importantly our customer accountable - which most ERP Partners fail to do (in my humble opinion).  

For some of the reasons why I believe ERP partners don't hold their customers accountable, read Getting Naked by Patrick Lencione

I've added some infographics and information to explain this process here on the Sabre Website and recorded the following video (with many others following).

To find out more - see my Introduction to Sabre YouTube video, and join us for one of our many informational events.

by Sabre Limited

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