"Why Should I Pay You To Give Me A Quote?" (Part 4 of 4)

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Posted by: briansittley Comments: 0 0 Post Date: September 11, 2014

erp pricingThis is the last post of a 4-part series on ERP pricing, and the why companies first need to complete a Business Process Analysis before acquiring a new software system.  It reflects the cumulative lessons gained from 25 years’ experience implementing ERP and MRP systems.  The first post is found here.
 
Results
MRP II pioneer Ollie Wight used to say that “People are the A item.”  Data is B, and the computer is C.  Today, we’d insert “Process” between A and B.  Consistent processes, known and understood by your people, are the key.
So what do you end up with from the BPA?
The BPA produces deliverable benefits, namely: Your company learns about itself, and how things really work – and that knowledge is then documented.  With a Business Process Analysis:

  • Management – and key staff – are engaged
  • Key processes are documented, at least at a high level
  • A roadmap for your implementation is outlined

And as a result you end up with:

  • A well-defined list of project goals often based on KPIs (Key Performance Indicators)
  • A clear sense of required functionality, by phase
  • A prioritized project task list
  • A general sense of the size and scope (and roughly, cost) of your project
  • A fact-based foundation for a subsequent software & services estimate
  • The ability, finally, to make an intelligent decision about what you want to do next

That last point is important.  Without the BPA, you don’t know whether your project will cost $X, or $3X or $5X.  Since you know in your heart that most of the work of a BPA must be done at some point in your project, doesn’t it make sense to separate out that piece of the engagement?  You can spend a little money upfront to learn the scope of your real needs before you spend a lot more money. Wouldn’t you want to know the answer to that question before you put down money on a new system?
It’s done on a modest, fixed-fee basis (at least at our firm).  And you get to know the caliber of your potential implementation team long before you make any larger financial commitment to them – almost like a test drive!
What do you lose if you don’t do the BPA?
We built an entire case study [ask us for a copy] around a client who hired us only after they first did it the other way – without the BPA.  The bottom line was this: What they thought was going to be a $125,000 project was nearly twice that by the time they called us in.  Numerous modifications and more change orders than they could count later, the project was headed toward 300% of budget, and they still weren’t live.
It’s not that the high cost wasn’t valid.  But don’t you think the owner would like to have known that before he started the project?  He made it clear to us he did.  With a BPA, he could have – indeed would have – made a better-timed, more intelligent decision.  A modest investment upfront would have yielded a clearer picture of the project’s true costs.
In the end, the old cliché once again proved true: It doesn’t cost, it pays.
You’re not just paying for a quote.  You’re buying insurance.  And saving money in the long run.  Call it peace of mind.  For a modest fixed price at that.
 

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