With the downturn in the economy, ERP vendors are seeing decreased business. We were considering purchasing an ERP solution in the next 6-9 months - does it make sense to start that process sooner if we feel we can negotiate a better deal?

Buy and read "Why Systems Fail" by Phil Simon. This is the first book I've found that focuses specifically on the pitfalls of selecting and implementing enterprise software (ERPs, financial packages, etc.). I have no vested interest in the book; I happened to buy and read it myself in the past few months. ..bruce..

A question, has your business environment changed enough that you will still need a new ERP in the next 6 to 9 months? If so, you have the funds, etc. then it would probably be wise to accelerate your purchase assuming that you can get a better deal in the current environment. The way hourly rates are falling in the IT area now is a good time to buy and lock in a price. If your business environment has changed enough where you aren't comfortable then don't do it. Also, if you do a deal, make sure your vendor has the financial strength to weather this great recession.

There are a lot of questions to answer when you are considering a purchase like an ERP system. This is not just buying hardware. You have all the piloting, evaluation, RFP prep, etc.

Some questions are:
1) Are you ready to start this project now?
2) Is the business ready to start this project now?
3) Do you have the resources to start this project now?
4) Are the conditions that warranted the project 6-9 months from now in existence now?
5) Assuming the business case exists for the move in the future, does that business case exist now?

Having gone through 2 ERP migrations myself, I know that if the business case and resources are not available, you can have a very rough time of it.

If you have the finances, resources and the opportunity, you can test the waters on pricing, but unless you have a good project plan and requirements list, it won't tell you much.

Just my $0.02..

Yes it does make sense as getting a better deal is time driven and if u want the system, its always better to give it some time to get hang of it. Even at later stages you can customize it to suit the requirement shifts and that wont be too costly either. For some good deals you can check this out.

ERP Solutions
http://erp.usourceit.com

Sonal Maheshwari
USourceIT your single source for all IT needs

All the advice given above is solid and needs to be followed. ERP projects can shine on or sink your boat, rarely anything in-between. One big item that is sometimes forgotten is how do you maintain, update and customize after the initial deployment has settled in. If you use software that has a black box for development, then you end up outsourcing everything and the costs can really spiral. Watch for customizations that get out of control. Sometimes an ERP is over-designed and the customizations can put you in a corner of not being able to change or update the core software without additional costly outsourcing. Sometimes even the original vendors of the software cannot help diagnose your bugs or problems because they hear "customization" and drop any pretense of support since you have customized the product.

Even if the entire company has bought into the ERP project, if changes occur to the business model or needs and the ERP project cannot change without throwing lots of time and money at it, you will be surprised how quickly other departments can disavow their support for your ERP system.

Document Document Document and good luck!

ERP means far more than just buying and installing a software package. It is a project by itself!.

The ERP represents the "management vision" of your enterprise. You must have that vision very clear to start looking for the tool to make it a reality. Next, ERP are not a fixed solution, but a flexible set of services and components that should be adjusted to fit your management (I mean not customized nor re-developed). That has its cost, in terms of resources, time, implementation, deployment, training, feedback, testing, parallels, etc. That works backwards too (the wag the dog syndrome I talked about sometimes), having your management to be changed to fit the solution!

Delaying the start of those discussions, aimed to define the vision and get clear requirements (which you can do ahead of the ERP), will move the issues to the time you have to pay the ERP people for tuning and deployment, which will only increase the price.

So, rule of thumb: have clear what you want, clear requirements, so you have a better panorama to evaluate solutions, and so it makes implementation and deployment easier and thus, minimizing costs. Do not relay in crisis times, since they may be hidden costs.

Cheers!

The economy has made this a good time to buy an ERP solution or most anything else for that matter. Much more important is to realize that selecting and deploying an ERP is a long term and strategic decision and therefore requires solid due diligence before finalizing the selection. Since you are considering to buy an ERP in the next 6-9 months, I highly suggest you begin your ERP search in short order. You will need the time to scope the requirements, build a list of possible ERP vendors, have overview demos, narrow the list to 2-3 companies, and finally make sure you do your homework with regards to due diligence by talking and visiting with customers of the ERP vendors. You can only see some functionality at demos, but the real "source of the truth" regarding product quality, implementation cost and pain, quality of the Customer Support organization, scalability of the software, costs of maintaining and accessibility of the ERP executive management team can only come from talking to customers of the ERP vendor.

Stephen,

It might be too late to contribute to your decision back in July...but thought I'd share this with you:

Below is a list of facts collected from various studies regarding ERP systems and implementations:

Avg. Cost to Implement*
• Tier 2: $3.46 million
• SAP: $16.8 million
• Oracle: $12.6 million
• Microsoft: $2.6 million

Avg. Time to Implement*
• Tier 2: 17.8 months
• Microsoft: 18 months
• Oracle: 18.6 months
• SAP: 20 months

Project Performance
• ERP projects that take longer than expected: 93 percent***
• ERP projects that exceed original budget expectations: 59 percent***
• Tier 2: Percentage of expected value achieved 68.6% *
• ERP project delays caused by lack of business-to-business planning and integration could cost manufacturers more than $1M/month**
• 85 per cent of companies surveyed had experienced delays in roll-outs as a result of B2B integration issues (which can cost over $45,000/day)**

*In ERP software comparison, SAP scores highest, but Tier 2 competitive
Courtney Bjorlin, News Editor at SearchSAP.com
March 3rd, 2009
http://searchsap.techtarget.com/news/article/0,289142,sid21_gci1349659,00.html#

**ERP project delays cost manufacturers $1M a month
Published by GXS
September 28th, 2009
http://www.marketwire.com/press-release/Gxs-1047274.html

***2008 ERP Report
Panorama Consulting Group: Eric Kimberling
January 7th, 2009
http://www.panorama-consulting.com/whitepapers.html
http://it.toolbox.com/blogs/erp-roi/panorama-issues-2008-erp-report-29172

With numbers like these, the question is why would you implement any ERP systems at any time? They cost too much, take too long, and only have a 7% chance of success. There are other alternatives.