Gulp. You want to charge us how much for a new ERP?

At a recent vendor event, we bumped into a prospect (let's call them X) that we'd provided with an ERP proposal. We had lost the project to another ERP partner whose price was a staggering 60% less than ours and thought we'd never see X again. But in meeting with them again, we had a great chat and parted on good terms, with the CTO promising to reach out and talk business sooner rather than later.

So, why did they want to reconnect?

Interestingly, after X chose their new ERP partner, an independent advisor of theirs recommended that they rethink their decision. While their chosen ERP partner appeared to offer a cheaper option, the advisor suggested it was highly likely that Fusion5's price was more accurate and comprehensive. Already a little way down the implementation track, X told us they regretted not taking that advice on board. They could see more change request invoices coming in for 'extras' as the ERP implementation progressed and that the final price would end up higher than what Fusion5 quoted from the outset.

In our experience, accepting a 'cheap' quote will almost invariably end in tears of frustration and disappointment, and in the worst-case scenario, job insecurity. But why was our proposal so much more comprehensive than X's chosen ERP partner? What do we know that X doesn't when it comes to comparing proposals?

They are good questions. So, we've written this blog to explain our approach and perspective.

We all know the saying, 'The devil is in the details.' And when it comes to an ERP proposal, details are everything.

Most RFPs are set up with yes/no tables, so you can tick items off your requirements list and collate the data to compare one vendor's proposed solution against the next. In an ideal scenario, the ERP will fit nicely with minimal configuration or development, which will control costs, reflect industry best practices, and make life easier going forward.

Outside of the software licenses for the ERP solution, the main costs are for the professional services people needed to deliver your project and of course, anything 'unknown' or 'overlooked' at the time of preparing an RFP (which frequently includes the necessary integrations to other line-of-business applications). The people costs can be a grey area in many proposals which can make it difficult to tell if the partner is undercooking the costs. Yet, it's also the area that significantly differentiates one partner from another, reduces implementation risk, ensures your ERP project is successful, and will transform your business in the ways that you expect.

While you will doubtless take the time to compare implementation prices, you may not know how to dive into the details of who will work on your project, their skills and capabilities – and real-world experience, how you will work together, who 'owns' what, how much of the project will you need to resource, and where the buck stops.

Companies that experienced very successful ERP implementations noted internal organisational elements like support from management, good change management programs, strong project governance, and due diligence as primary reasons for success.

Data suggests that effective change management significantly boosts project success, with a sevenfold increase in the likelihood of meeting objectives and timely, on-budget completion.

Fusion5's approach: To ensure we work to budget, timeline, scope, and customer satisfaction, we have a Project Management Office (PMO). Our PMO team participate in steering meetings, conduct audits, and issue weekly status reports (Red, Amber, Green) to enable early issue identification and intervention if any part of the project starts to go off track. Our PMO team measures and reports on all aspects of the project so we can guarantee accountability, deliver what's promised, and adhere to the agreed project methodology.

🚩 What are the red flags? If your potential partner doesn't have a PMO or suggests that either they (or you) provide a single project manager for the project duration, you face the same risk as having a single consultant for the implementation. With only one person, and no backup or formal management, review, reporting and risk mitigation processes, or senior overview, your project has a far higher likelihood of exceeding budget, veering off the timeline, and failing to address issues before they become much larger and expensive problems.

Fusion5's approach: For everything within our control, the buck stops with us. Our project team always includes a Senior Supplier (often part of our Executive or Senior Leadership team) to maintain executive relationships and contribute extensive project management experience. Essentially, they own the project and our business relationship, and they are dedicated to securing successful outcomes for your business. Our Senior Suppliers are very hands-on, attend all Steering Committee meetings, and actively review risks. This important additional level of accountability, reassurance and communication greatly contributes to a project's success when it comes to budgeting and meeting deadlines.

🚩 What are the red flags? If an ERP quote doesn't have this oversight and doesn't involve a senior member of the vendor's organisation in your implementation, who will you turn to? If there are issues to resolve, will you have the comfort of talking to senior staff who have the authority and experience to make decisions that benefit the project?

Fusion5's approach: We believe in shared responsibility through cooperative collaboration. Customers play an important role in project success, so we guide you through your responsibilities, providing complete clarity of who does what and when – and how long they need to commit to the project. Although our customers are accountable for testing, data migration, UAT, and end-user training, we provide active support for all these important aspects of the project. We typically have dedicated testers, data migration consultants and certified end-user trainers on the project. These extra resources, above and beyond the core consulting team, provide the support needed to ensure the project is completed on time and within the budget outlined.

🚩 What are the red flags? Watch out for proposals that don't outline your project responsibilities. A lack of transparency and clarity about the time and effort required from your own team can lead to misunderstandings, delays, and unclear expectations and acrimony – on both sides. A successful project hinges on collaboration – and a detailed 'guide to who does what, and how many hours should you allow' – is imperative to make this happen.

The other critical factor is support. How do they plan to assist and guide you through the aspects of the project where your contribution is essential? Have they adequately considered the support you'll require for tasks such as data migration, testing, and project readiness? Clarifying these aspects is vital for a smooth and successful collaboration.

Fusion5's approach: Our engagement yields comprehensive, highly detailed Statements of Work (SOWs), clearly outlining what you can expect from us and your ERP, written in plain, easy-to-understand language. We also deliver solution design documents, prototypes, provide clarity around a Risk Management Plan, and regular updates to the change management progress. These allow you to understand what's going on and how the implementation will deliver the project to scope while meeting your business objectives. We always provide explicit project assumptions that our quotes are based on – e.g., availability of your resources, internal project management resources, managing your User Acceptance Testing (UAT) process, extracting your source data, etc. These assumptions – and your answers to each - directly impact the investment proposal.

🚩 What are the red flags? Without a detailed SOW, it's your word against your partner's should the project progress or outcome disappoint. If the SOW is only a few pages long, it's likely missing key details that make the project's success more subjective, leaving room for ambiguity and making it challenging to hold your partner accountable for deliverables.

Fusion5's approach: We have tangible proof of our ability to implement ERPs successfully with a wealth of case studies and the highest industry awards. With thousands of projects under our belt, our customers can be confident that we're not learning on the job at their expense. We're always happy for you to talk to our current customers and review our case studies so you can validate your expectations of our approach and abilities.

🚩 What are the red flags? If your ERP quote doesn't contain customer references or offer referees to talk to, beware. This can reflect either a lack of experience or a poor history of successful deliveries. Without the ability to validate your prospective partner's claims, it raises concerns about their ability to meet expectations and deliver a successful ERP project.