Technology adoption is alive and well within the ERP software community. Vendors and value added resellers are embracing SaaS and cloud technologies and introducing the technology to customers. Cloud and web-based ERP software has moved beyond the early adoption stage and is ready to go mainstream. In this article we discuss how vendor references may put a drag on the technology adoption curve.
The Challenge of New Technology Adoption
When the cloud and web based software provide so many advantages for ERP software buyers, why are some users reluctant to make the switch?
Sometimes switching is difficult because there are issues of data conversion and delivery of features that have been customized on a legacy solution. In other cases, legacy vendors and the entrenched community have taught customers that the way to buy software is to “follow the crowd”.
Following the Crowd
On a community forum, we noted two comments related to the ERP selection process that suggest a “follow the crowd” strategy for ERP software selection:
Comment 1: “Talk to companies similar to your own. If the ERP vendor doesn’t have any customers in your industry (and size), then what does that tell you?”
Comment 2: We use (vendor name removed) and their customer support and out of the box fit is great for us (Make-To-Order metal fabrication) I would talk to companies using the software without even involving the software vendors and consultants. Talk to single site companies that are MTO Aerospace and Machinery and 35 million in sales. Go to Google and search for “cloud erp software”. Then go to the software vendors sites and see if you can find companies referenced that are similar to you and call them up.
Contacting references is a good idea. But do not let that be the sole criteria for your decision. The follow-the-crowd strategy may not be the best for your business.
Choice of references
Companies with a large number of accounts will have some satisfied customers and some unsatisfied customers. Guess which type of customer will be listed in their references section.
Get an edge on your competition
How do you differentiate your company? Superior service, flexible pricing, unique product lines, or something else? In many cases your ERP software can give you a competitive advantage by improving service or reducing your costs. If you limit yourself to old technologies being used by competitors, then you will rise only to the level of your competition. When changing ERP software, you have the opportunity to jump ahead by providing access from anywhere, a custom portal, better teamwork, more efficient processes, etc. Purchase software that supports your company’s strengths or growth plan.
Vendor and VAR references
The opinions you obtain from references are impacted by both the software vendor and the reseller. In some cases a reseller will save an implementation that would otherwise ended poorly. In other cases a reseller may sour a deal by delivering poor support or slow response times to a customer. If you purchase from a reseller, then vendor references will only tell half of the story.
Flexible software in the hands of a knowledgeable reseller
A winning combination involves flexible software built with the latest technology in the hands of a reseller that understands the details of your business. There are several reasons to select the value added reseller (VAR) model. These include:
- Deep understanding of your business. VARs often have expertise in a particular area (manufacturing, distribution, non-profits, government, project based accounting, etc.). They can apply knowledge of past implementations to your business.
- Cross vendor knowledge. Some VARs have experience with more than one software solution. A working knowledge of different products can be very beneficial for your software selection.
- Customizations. If you have specific integration and configuration requirements, then a reseller can build and support them. Frequently resellers are more responsive to your customization needs than vendors.
- Local Support. In the era of SaaS, Cloud, and web, the benefits of local support may be dwindling, but an in town VAR is available for face to face meetings for requirements gathering and support.
A software vendor that sells directly to businesses may provide their own solution engineer that has expertise in your particular business vertical. If you go the vendor-only route, make sure that you get to meet this person who will help you before signing your contract.
This blog advocates the adoption of new technology. We do not want to undermine the process of getting references, but it’s more important to adopt ERP software based on your business needs, not the experiences of potential competitors that might be using 5-20 year old technology.
Just because everybody else is doing it one way does not mean that you cannot adopt somebody better. Your best bet might be a software reseller in your industry that can deploy modern technology and customize it to the needs of your business based on experienced gained implementing legacy systems.