Why your ERP/CRM vendor doesn’t have your best interest at heart.
“The last happy day most businesses have is when they buy a new ERP [or CRM] system, it usually goes bad from there. “– A colleague in discussion about an unhappy client in 2016.
So, you spent a ton of money on a new ERP, CRM, or financial system. Your vendor is ready to go. They keep pushing to begin mapping your business processes to their technology platform. Everything is smooth sailing from here, right? Wrong. This is the usual turning point when most implementations go bad.
According to a study by Panorama Consulting Solutions, the average ERP/CRM implementation project is 57% more likely to exceed the original timeline and run over budget. The study also states that just over 50% of companies implementing new systems were satisfied with their vendor. From experience, these figures are very close to reality.
Why is this true? There is a reason they were the lowest bidder.
Most companies believe hiring an ERP/CRM vendor is all that is required for a successful project. This is almost never the case, and it’s not the vendors fault. Smaller vendors are not structured to take all projects to success. Most mid-sized and smaller businesses can’t afford the high-ticket price of an enterprise system. Large ERP/CRM vendors approach implementation with large teams, project managers, and specialists who focus on a single area of expertise. These large teams are not always a panacea, but they have a much larger success rate than their smaller counterparts. If the million-dollar starting price is beyond your company’s budget then you are left with the small and mid-market providers. Even with a good implementation methodology and stellar team, these mid-sized organizations are not constructed to take your business through a successful implementation without significant effort from your team.
Why you ask?
Limited understanding of your business.
Vendors don’t have the time to fully understand the nuances of your business. It has likely taken your staff years to develop processes and procedures. Most implementers schedule two to six months as implementation timeline to translate your business to their system. Their success is predicated on the assumption that you can explain and can quantify everything about your business processes. Their second assumption is that their consultant will be able to accurately replicate this information into their system. This fails when companies have limited resources or the team member they picked (i.e. Your IT guy) has limited institutional knowledge.
All consultants are not created equally. Limited Resources prevent a deep knowledge base.
You did your project kick-off meeting and met your vendor’s sales team and lead consultant, let’s call him ‘Bob’. Don’t be surprised when they tell you ‘Joe’ is going to be your consultant. What happened to Bob? He really seemed competent and understood what we are doing here. You haven’t met Joe and have no idea of his qualifications. Don’t worry they tell you, Joe is new, but Bob will be watching over him to make sure everything goes great. WRONG! Bob has a full workload. He goes to all the kick-off meetings and they have him busy on other clients. Maybe you get lucky and get Bob, but you’re probably going to get Joe.
Most consultants have only been in the service provider role. They haven’t been in your role.
ERP/CRM vendors often have consultants who have not worked in any other industry. They get recruited out of college and spend their careers as a consultant. Unhappy clients are norm for them. It is what they have seen since the beginning of their career, becoming hardened to upset clients who are just trying to run their business and are upset about budget overruns or not being ready at the original date. In the consultants mind the problem always seems to reside with ‘unreasonable’ customers. They only seem to react to screaming and threats of litigation before they put effort into making things right. There are exceptions, but the truly competent consultants get promoted or leave for a more client-centric organization. Leaving you with a good chance of getting an inexperienced or one-dimensional consultant.
What’s the answer?
Bring in a partner that can work with your company to formalize and translate your processes beyond the one or two days a week your vendor is onsite.
If you get the less experienced ‘Joe’ consultant, let them focus on the implementation of the system and not try to bridge between your processes and his learning of the system. If you, get the Experienced ‘Bob’ consultant, you add to his productivity, and your chances of success by giving him access to resources who have availability and deep institutional knowledge.
Communicate your expectations as clearly as possible to your vendor and make sure they confirm back that they understand. The way to keep tempers from rising, is to keep in front of potential issues by having a semi-dedicated resource who can focus on getting the vendor what they need in a timely manner to keep your project on track.
The right partner will save your company time and resources and significantly reduce timeline slide and budget creep. Spend as much time evaluating your partner as you spend finding the right ERP/CRM system. If you don’t have the internal resources to give to your vendor, consider a third-party consultant that will represent your company and keep your vendor on track.
If you are already in a bad implementation, it is not too late to bring in an “Advocacy Partner” and put your implementation/upgrade project back on track. Find someone who has sat on your side of the table and understands what it takes to drive your business to success.