Every year, it seems as though there are more and more ERP failure horror stories being published. McKinsey has estimated that ERP failure rates are still at the 70% mark and while large ERP companies keep promising that their software is the best tool on the market, things don’t seem to be improving. Pitfalls like poor change management within the organization, a lack of commitment from executive leadership teams, and poor project management are all touted as reasons for these failures.
All of this doom and gloom has given rise to a ‘solution’ – the use of ERP software consultants. These consultants are touted as transformational experts who can guide an organization from its old, disparate management system into a new, innovative solution that addresses business requirements, cuts costs, and accelerates adoption in one fell swoop.
Afraid of failure, many businesses are quick to spend an exorbitant amount of money and time hiring consultants to oversee their ERP implementation…without improving their odds for a successful implementation. It seems that ERP systems are still being sold by consultants who don’t fully understand what they are selling to customers who aren’t 100% sure what they are buying.
Clearly, the best ERP experience doesn’t mean adding more costs and more people to a project. It requires a wholly different approach.
Picking the Best ERP Implementation Company
When we talk about ERP failures, we rarely refer to systems that fail to go live. It usually refers to ERP systems that are implemented, go live, and fail to deliver as promised. A good ERP software system will cut costs, reduce production lead times, streamline efficiency, improve customer service and retention, and increase profits. Most ERP systems are designed with features in mind to achieve those goals, but where does the responsibility of realizing those benefits and making the most of those features lie exactly?
We’ve done a little digging to see what some of the best ERP companies and consultants in the market think:
“What’s the biggest success factor? Your project team. Case study after case study of ERP implementations tell the same story: the make-or-break factor is the implementation team. Great software is only great if implemented by a strong team. If people lack the time, support, or skills to do the job effectively, they will not be successful – and the project will likely suffer from delays, additional costs, and/or software that fails to meet the company’s needs.” (SAP)
“Establishing a strong project team is critical. Typically, an ERP implementation team includes an executive sponsor, a project manager, and representatives of key business groups involved in the project. Having an executive sponsor who can adjust business priorities and pull in additional resources when needed is vital to success. The team’s responsibilities involve establishing top-level goals, requirements, and key performance indicators (KPIs); conducting day-to-day project management, including ensuring that the project stays on time and on budget; and measuring results. Because of the expertise required by the project management functions, less-resourced companies may need the help of an outside consultant to overcome these challenges.” (Oracle NetSuite)
“The most important thing to guarantee the success of an implementation is executive support for the implementation. For maximum effectiveness, the entire organization must document and exercise the processes in the system to ensure minimal impact on customers.” (Aptean)
Clearly, ERP providers feel that the responsibility for successful implementation and ongoing customization of their own software lies with their clients, and that third-party consultants should fill whatever support and implementation gaps crop up after the sale has closed.
By shifting the responsibility off their own shoulders and onto clients and consultants, the implication is that clients are solely to blame for implementation failures. This pervasive attitude has contributed to creating an industry with a dismal success rate that most customers don’t feel qualified to question.
The Cost of Consulting
The ERP consulting industry is notoriously opaque. Nonetheless, customers have enough on the line when it comes to their ERP system that they are willing to shell out as much as it takes in order to acquire the “best ERP support” money can buy.
According to Quora, most consultants charge between $100-200 per hour for their time. An Oracle NetSuite partner we found charges around $175-225/hour. Most consultants prefer compiling personalized quotes for their customers (which is sometimes consultancy speak for “finding out how much you can afford first”). Unfortunately, if the current success rate is any indication of what’s going on in the market, you might find yourself out of pocket tens or hundreds of thousands of dollars for your ERP system without full satisfaction with the product.
Who Is Best Positioned to Help Your Company Succeed?
Don’t get us wrong: we’re not saying consultants are out to rip anybody off. Many companies need help successfully implementing and customizing their ERP system, and simply do not have the internal resources to do so.
That doesn’t mean that we think the use of third-party consultants is the best solution to the problem, however.
When we created 10X ERP, we did so from the ground up, meeting with professionals in various industries to understand their pain points and get their feedback on the product in real-time. We realized very quickly that even the most thorough user and UX testing protocols can only do so much to help a company succeed in the real world when they have a limited feedback loop to those designing the product.
Whereas other ERP software companies seem to think they should churn out the most features in their product before handing it over to consultants to deal with users, we felt different from the start and designed our business model accordingly.
After all, who knows how to implement and optimize an ERP software system better than the people who created it and continually improve it?
We shouldn’t push the responsibility for success squarely onto the shoulders of clients and ask them to fork out many thousands of dollars paying consultants to make sense of the tool after they’ve already bought it. A modern, user-friendly, and customer-centric ERP system should meet the current and future needs of a company in a painless and non-intimidating way.
As a full-service ERP provider, we share the responsibility for implementation and the pure joy of a customer’s success.
There are several benefits to this full-service approach.
- Lower time and cost to implementation: A full-service approach can reduce the cost and the time to value realization by up to 50% or more.
- Continual improvements: As hands-on software developers, we relish being able to spend time with our customers and gather direct feedback from our end-users and business partners that allows us to continually improve our product and innovate in an agile way.
- Instant customer support: Unlike middleman consultants that need to revert back to vendors and rely on third-hand experience to help companies troubleshoot and improve their system, we can provide instant, knowledgeable, and responsive customer support and service to our clients at all times.
- Lower operating costs: 10X ERP can optimize your ERP at a fraction of the cost and reduce your ongoing operating costs because you don’t need consultants or internal resources to manage your ERP.
- Reduced complexity: Our simple and transparent approach cuts the complexity so that we can work in true partnership with our customers.
The benefits and the feedback we receive directly from our users and customers help us build the best product on the market, and allow us to help your business cut six figures in implementation costs without blinking an eye.
Leading the ERP Experience Revolution
Consulting may be the status quo in the ERP industry, but that doesn’t mean it’s the best possible approach. What if the best ERP implementation company you can choose is the one that actually knows the software inside out? What if the best consulting expertise is not achieved by attending training sessions or achieving accreditation from a tech institute, but through years of actually building the product from scratch and testing it in the real world?
At 10X ERP, we’ve looked at the status quo and decided: it’s not good enough. We developed our model to be a full-service ERP provider committed to the success of every business that chooses our software. We didn’t just set out to build an excellent product – we set out to build an excellent product that you can implement, use, and continue to use to contribute meaningfully to the success of your business.
If you’d like to join us in taking a different approach to ERP software and success, reach out to us online. We’d love to provide you with a full, consultative experience – without the hefty price tag.