Reduce Risk of ERP Implementation Failure: Pre-Contract Business Needs Analysis

You naturally want to minimize risks and avoid cost overruns before signing a long-term contract for a new ERP system. Your prospective vendor also wants to minimize risk, but is usually not in a position to do anything other than give an implementation estimate based on lots of assumptions about scope, roles and responsibilities. These assumptions could be fairly accurate, but could also be way off, which could lead to surprises and costly change orders during the implementation.  Neither you nor the vendor want this to happen.  Wrong assumptions that lead to change orders will create frustration, friction and could […]

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Statement of Work (SOW) Stoppers

The SOW is a key document from your vendor that can make or break the implementation. The vendors will do their best to reduce their risk by limiting scope to a high level list, assuming that you will follow best practices, and making a lot of other assumptions about you doing work that you don’t know or understand the effort to complete.  As the vendor risks go down, the customer risks go up.  We recommend the following: Scope is tied to the requirements in the RFP which need to be specific Best practices should only be applied to processes that […]

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ERP Cost Estimates

Buyer beware when estimating the costs of an ERP implementation. There are so many unknowns that make it really tough to avoid unpleasant surprises. The vendors are very reluctant to fix price anything when it comes to the services required because of the many unknowns – scope of work, who does what, capabilities and available time of buyer resources…. It’s especially difficult for the vendors in the early stages of the selection process. At the same time, the buyers want to have a decent ball park of costs before pursuing a potential solution. But there are guidelines that will help. […]

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Buried in software licensing

August 2, 2013 from Computerworld – “David Steinour is at his wit’s end with enterprise software cost increases. In each of the past three years, the CIO at George Washington University (GWU) watched his annual maintenance and support costs for Oracle Financials and related enterprise software jump by at least 10%. “Oracle works very well, but at the end of the day we pay a huge price for that service,” Steinour says. Today, 99% of the fixed-cost increases in the university’s IT budget come from software maintenance price hikes. “That’s just not sustainable,” says Steinour, whose IT department supports 20,000 […]

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10 Things You Just Gotta Have in Your Cloud Contract

April 30, 2012 from CFO – “A CFO’s guide to the wild and wooly world of cloud services in which contracts are mutable, companies come and go, and politics a continent away could materially impact your business…” Read more 180 View –Although we don’t think that cloud computing contracts are as risky as the article indicates, there are still some good suggestions. […]

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How to negotiate software contracts

January 2011 from CAmagazine and written by Michael Burns – “A major acquisition such as an ERP system should be considered a lifetime investment. It’s not just a software purchase; it’s a contract that includes maintenance fees, which will exceed the cost of the software in four to five years. A good dose of due diligence is in order — not only in testing the software and assessing the vendor, but also in reading the contract… ” Read more […]

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