An ERP purchase is one of the most substantial and important IT investments your company will make. Choosing the right partner is critical to making sure you meet your targeted return on investment. Add these 6 underrated questions to your ERP and business partner evaluation toolkit to ensure you make the right ERP software vendor selection.
1. “Who works for your company and what do they do?”
There are multiple ways to run a profitable software sales company. Not all of them are equally adept at ensuring your success as a customer.
Are you talking to a company overstaffed on the sales side and understaffed in delivering the services you are purchasing? Asking about the employee make-up of the company goes a long ways to answering that question.
Has the vendor brought in experts in your field to work as analysts? Many top vendors have. You’re potentially purchasing access to this company’s support services. How well staffed is technical support? What’s their expertise and the length of their tenure? Finding out how long key employees have been with the company can tell you a lot about your potential business partner’s stability and the health of their organization. As Josh Bersin, the Principal at Bersin, a Deloitte research company, observed in a round up of research on the impact of employee retention, “Tenured employees drive far greater value than those who are ‘cycling through’ the business.”
Make sure to also find out which employees will be part of your team. Finding out who works for a company and their credentials, not only tells you a lot about their organization, it also allows you the chance to point and say, we’d like access to that particular individual and their expertise—will you provide it?
2. “What is the extent of your service offerings, even beyond our immediate needs?”
Beware tunnel vision. Like it or not, when you are choosing a vendor, you are forging a strategic relationship that is difficult to change. There is a learning curve for any vendor in terms of getting up to speed with the particulars of your business, your processes, and how their software adapts to the environment. Changing vendors always introduces time and expense.
It’s critical to find out if a vendor will meet your needs both now and in the future. The breadth and quality of services is important to consider. Custom programming, support for related products, integration expertise, SaaS/cloud support, the availability of managed services… As your needs evolve, you may require access in an area you don’t presently. Understanding a provider’s capabilities to scale with your evolving needs is critical.
3. “What referrals can you share?”
Okay, you’ve heard this one before. We know. But we’re going to share some of our insights into “how” to ask for referrals to make sure you come away with truly meaningful information.
The key when asking for referrals is taking the time to set some parameters to make sure you are getting relevant referrals.
Yes, of course, ask for referrals that are relevant to your industry. You need to know that your potential ERP partner is well-versed in the business challenges that are relevant to you. But, don’t stop there.
Ask for both a referral from a long-term customer and a new one. They’ll share very different insights into partnering with the vendor. You need to know both where a company has been and where it is now. A newer customer will be able to most clearly share with you information on your immediate considerations. They will be a great source of information on the implementation process you are contemplating undertaking. The longer term customer though will share equally important information on partnering with this company for the long-haul. What’s the overall value they’ve seen? What do they think of the support services? How has the provider adapted to their evolving needs?
Also, don’t be afraid to ask for real access to existing customers. It’s not uncommon for ERP providers to arrange product tours for prospective clients with real customers. The willingness of existing clients to share their time in this way speaks very loudly in terms of their feelings about the value they are receiving from their ERP vendor.
Customer Reference Checklist
- Ask for an industry specific reference, ideally using the same software
- Look for references from both newer and older customers
- Evaluate the references for the level of enthusiasm
- Key data points include: overall cost, ROI, and length of implementation
- Distinguish between satisfaction with the software and the support
4. “What do you think we can do better?”
Imagine the differences in how this question will be answered by a company that is looking to simply sell their product’s features and one that is looking to understand your real business challenges and come up with technical solutions for them. In fact, the beauty of the question is that it will help you very quickly identify which type of vendor it is that you are talking to.
Also, remember, ERP vendors are trying to win your business. They may be holding these type of observations close to the vest, concerned about giving offense. But allowing providers to speak freely about inadequacies they perceive really amounts to maximizing your ability to identify growth opportunities. A provider is not going to know your business as well as you do. But they likely have an advantage you do not. In their business, they have tremendous exposure to what companies are doing with technology and what’s really working. Providing them the opportunity to speak candidly about how this relates to your firm is a business intelligence opportunity for you. It’s also a chance to identify which providers have the most insightful suggestions to offer.
5. Ask for access to the user community.
And here it is… Probably the most ninja-level ERP provider evaluation question on this list.
Many, many ERP vendors and software developers support web-based user communities. (For an example of an active forum, check out Syspro’s user group community site.) Very often these are password protected user forums for existing customers only. The beauty of these type of support forums is that they provide a real, unvarnished look at the truth of what it means to be a customer of the provider or user of a specific program.
Whereas asking for a referral is an opportunity for providers to cherry-pick their favorite success stories, access to a user forum provides an unmoderated viewpoint. Asking for this access may make a provider nervous. Just how nervous, though, may be a key piece of information for you to consider as a software buyer.
6. “What is the your relationship with the developer?”
Most ERP vendors don’t develop ERP software. Rather, they are providers of the software who are specifically authorized to sell, implement, and support the software.
Many developers support different levels of partnership for software sellers of their solutions. They may distinguish between their partners on the basis of completion of certifications, areas of specialization, volume of sales, or other factors. An ERP software vendor’s partnership level often also affects the pricing they are able to provide. When considering an ERP vendor, taking time to understand the relationship between the vendor and the developer can provide valuable insights.
To probe into the nature of the vendor/developer relationship, keep the following questions in mind: How many customers do you have using the software? How long have you been supporting implementations of the software? What has lead you to partner with this developer rather than other competitive options? These questions will help you identify the strength of the vendor’s commitment to the developer’s software, as well as their expertise at deploying and supporting it.