How To Get The Best Price On An ERP System

Everyone likes getting a good deal right? I certainly do. I can’t guarantee that you’ll get the lowest price for your ERP project but this article will offer food for thought on how to increase your chances of getting a fair price for your project.

When starting evaluations for a new ERP system my recommendation is to first focus on the solution(s) that best meets your company needs. Once you’ve selected the best ERP solution for your company you can then focus on getting a fair price for the software and services.

Of course, in order to get a good deal you need to know what a good deal is. You can go about figuring this out either from the assistance of a professional business consulting firm (Calsoft offers these services) or possibly by doing some research on your own. I suggest reading article 3), How Much Does An ERP System Cost (Click Here), in this series if you haven’t yet read it. Once you’ve figured out what a fair price is then you’re better equipped to negotiate to that fair market price.

How should you go about evaluating and selecting ERP systems?

To begin with, please bear in mind that if you don’t have a detailed requirements document to provide to ERP vendors when requesting project estimates then it will be difficult for the vendors to provide an accurate and detailed project estimate. The detailed requirements document may include your operational requirements, your workflow processes, your current system design and your future (ideal) system design.

If you don’t have a detailed requirements document then (a) you can first work with an experienced business consultant to go through a Detailed Requirements Analysis and have one created or (b) you can simply ask the ERP vendors for either a time and material based quote, or a (ballpark) fixed bid quote, based on their understanding of the requirements that your team has conveyed to them. Once the ERP project has begun and the requirements analysis document has been created by the ERP vendor that you’ve selected, then the ERP vendor can create an updated estimate for your review and approval.

Next, once you’re ready to begin evaluations of ERP systems I recommend evaluating 3 – 4 systems that are a good fit for your needs and are popular in your industry (For ideas on which systems to evaluate read article 2, How To Figure Out Which ERP Systems To Evaluate (Click Here), in this series.

Once you’ve narrowed down your selection to one solution, then (if possible) get 3 estimates from vendors that have a consistent track history for success with that solution. FYI, some solutions are sold directly by the software publisher so the only available implementer may be the software publisher. If that’s the case then it may not be possible to get multiple bids.

At this point you should have pretty competitive pricing and you’ll be able to confirm that because (1) you’ve figured out what a fair market price is and (2) you’ve received 3 quotes for the same ERP system from different vendors.  To further maximize your chances of minimizing costs for the project I recommend reading article 8), ERP projects – What’s Better? Fixed Bid or Time and Material (Click Here), in this series.

by Calsoft Systems