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Real-time visibility, process automation, and customer service improvements are only a few of the benefits of implementing enterprise resource planning (ERP) software. But enterprise software costs money, and businesses rarely have excess cash just lying around. That’s why we recommend negotiating the best deal you can.
To help you maximize the value of your ERP while maintaining an affordable price, we have outlined a few tips for negotiating with a vendor.
1. Clarify Roles and Responsibilities
While ERP negotiations are about achieving a lower software cost, it’s also about mitigating future project risks and clarifying the roles and responsibilities. Be aware during negotiations; if the vendor is putting most of the onus on you when it comes to the success of the project, this could lead to problems and additional expenses for you down the road.
To mitigate this risk, we recommend clarifying roles and responsibilities in the negotiation process. These are good questions to ask the vendor:
- Who performs system testing?
- How many internal resources do you expect us to commit to the project?
- Who trains end-users?
- Who is responsible for transferring and cleaning data?
2. Review Annual Maintenance Costs
Your annual maintenance cost is something you should absolutely think about during your ERP negotiation. Your ERP vendor will likely maintain the annual fee, especially if you have aggressively negotiated your up-front ERP costs. In your negotiations, we recommend including a maximum cap on how much the vendor can raise your maintenance, specifically by requesting that your annual maintenance can’t be raised during the first few years of use.
3. Assume the First Offer is a Starting Point
As with any negotiation, the first price is usually just a starting point. And in ERP negotiation, this is likely the retail rate. We suggest remembering that contract negotiation is a normal and expected part of the process. Don’t feel bad asking the vendor to lower the costs, especially the costs of licensing. Additionally, feel comfortable taking your time; the longer hold off purchasing, the better deal you will get. Vendors are usually adaptable when it comes to pricing.
4. Avoid Unnecessary Add-Ons
We stress the importance of business process modeling because it’s not uncommon for businesses to lose focus when presented with the myriad of add-on modules available. Most likely, you don’t need every module available from a vendor or all the custom buildouts and dashboards your consultant can execute. Instead, we recommend focusing on your immediate requirements. Once you’ve rolled out your more critical ERP functions, then you can start thinking about additional features.
Rather than pursuing every available feature and modification, simplify your implementation by focusing on your more essential processes. That way, you can avoid delays, errors, and budget overruns.
Negotiations can be time-consuming and challenging. Datix understands this challenge and has a working relationship with ERP vendors. We can help you get the best deal on your software while also achieving maximum ROI. Datix is a one stop shop for enterprise software solutions, so we have worked with countless software vendors. Plus, we tailor your software to your business process from start to finish.
Let us help you negotiate the best deal on your ERP! Contact Datix today.