Focus Research Insight: The majority of ERP buyers prefer a ballpark figure on the initial contact…

Anya,
Thanks for the response! This is great feedback to my question. I checked out your Quick Quote site and it seems excellent for your product! Many of the buyers I speak with ask for something like this, and I hope that someday other vendors in the space are able to provide a similar service: particularly for an end to end, full suite ERP.

Also, great feedback about those more expensive and/or variable components. Is this something you typically brief your prospects with? i.e. you can expect to pay approximately X, but understand these are areas where the cost can be substantially increased... etc. And since we're on the topic, in your opinion what are the most price-sensitive components in addition to the ones you mentioned?

Thanks again! Great Feedback!

Thank you Jessica. Yes, we try to start educating our prospects very early in the process about the estimated cost - and what will make that cost go up. We honestly try to help people save money, since we know that will make them grateful and happier customers in the long run. When we wrote the white paper that I spoke about (www.calszone.com/30questions) we actually outlined specific ways that companies can save money by making some smart choices with software. For example, buy only what you need to use for phase 1, don't buy the whole system yet. (unless you are getting some type of discount initially). This way you pay less maintenance fees as your system cost is lower. Or find out if the existing customer promotions are better than the new customer promotions. Purchase the base software, and the next day you qualify for the existing customer promos and can buy the rest. As for other areas that will drive up the cost - Data conversion is a big one. But there are ways to make smart decisions here too such as: only convert data from the old system at a summary level instead of a detailed level. For example, convert a summarized journal entry for an entire month’s activities instead of bringing over every journal entry for the month. Also ERP Software customization, not only are customizations expensive initially, but they also create long term costs. Custom pieces may have to be rewritten when upgrading to a new version of the accounting software. The result is substantial hourly fees. You may also be held back from upgrading and taking advantage of new features, which means your maintenance fees could become a waste of money.
And the biggest area that can cost people extra money is the cost of implementation services. Make sure you know the billing policies of the ERP Software partner you choose - what is their hourly rate, will this go up after initial install, do they charge for travel time? This all impacts the final cost. Anyone who wants an honest ERP Software quote for Microsoft Dynamics gp can certainly contact us at www.calszone.com

Most ERP buyers want an initial ballpark figure, and we guide them with standards we’ve developed over 20 years and continue to guide them throughout the sales business process analysis so they understand the detailed phases and steps to implementation. Most buyers are familiar with software prices overall, but the bundling that Microsoft provides with Advanced Management, Business Essentials, Suite prices, and a la carte modules may be a new concept. In our plain-English Guide to Selecting Accounting Software we provide some examples of budget ranges and discuss how we assist them in managing their budget and what they can do internally to manage costs; those discussions start in sales process, continue in the implementation kickoff meeting, and continue every week with a project management teleconference. We encourage buyers moving up from entry-level packages to implement within their budget, prioritizing the sequence of modules purchased starting with high-visibility successes. As an extra, we openly publish promotions and contact customers who’ve indicated they want to purchase modules during the next promotion. So to your subsequent questions, yes, we come close to many of the initial ballpark quotes and those can be quite realistic. The business process analysis and project management are critical to getting all the issues on the table for realistic quotes, and managing to a budget to keep the project on track. See our Guide at www.computeration.net/downloads-accountingsoftware.htm

Buyers should always look at an early quote as a low-ball estimate. In my experience it is rare to the point of being improbable that the initial estimate will not turn out to be materially lower than the actual purchase cost of the software. My advice to the buyer would be take the initial estimate, examine carefully what is and is not included, then look to estimates like the one Anya offers above to validate that the initial ballpark estimate is reasonable.

Anya's Quick Quote seems more focused on Financials, so I will offer my own that is geared towards ERP that covers more functional areas - http://www.rjmc.net/erp-calculator/

The true cost of the services piece of the ERP project will be determined by the software's fit for the buyer's company, the software package's complexity (a larger "footprint" of modules usually means more consulting services required), and the complexity of the buyer's business.

To keep the cost down, the buyer should ask "Do I really need that?" about every addition to the package, whether software or services.

I do not sell hardware or software and I can be reached at jeff@rjmc.net