While being an effective management tool, ERP software have seen a plethora of unsuccessful implementation stories. Why so?
An ERP sales cycle takes 6-12 months before a client makes a decision on an ERP vendor. During this phase, client evaluates a handful of ERP Vendors with each vendor giving his best shot ( presentation, promises, videos and demos) to win the account. The one who meets the expectations of the client in terms of features, functionality, costs, brand value and ease of implementation often bags the account. It is during this period that client’s expectations about his role and efforts required in the ERP implementation process are set – thanks to a bunch of desperate salesman trying to sell at any cost.
Often ERP vendors (fiercely competing to bag the account) convince prospect that their ERP Software implementation is painless or their ERP is ‘buy and use’ type, or meets most of the prospect’s requirement and requires minimum efforts from the client during implementation. With these over-enthusiastic sales and marketing pitch prospects often make an assumption that “ERP is totally a vendors baby” ; and thereafter buying an ERP software client is not ready to put in the hard efforts required to make any ERP implementation a success.
The catch-22 situation – of convincing a prospect that ERP is beneficial for his business but need significant effort from both sides and also selling it successfully – can be resolved by an effective yet ethical sales approach where focus is on understanding the business needs and educating the prospect on all aspects of buying an ERP software.
The success of any ERP (for both vendor and client) lies in its successful implementation merely because only after that the benefits/profits can be realized. Here are some insights for an effective sales approach that is beneficial for successful selling as well as effective ERP implementation thereafter:
1. Understanding Prospect concerns and expectations
First interaction with prospect should hinge around finding why does he want to implement an ERP software, what problems of his business does he wish to resolve through the ERP software. It should also help the vendors to understand his mindset. What does a prospect expects from the ERP software, apart from resolving his key pain points? What does he expect in terms of final outcome of the ERP, having heard so many stories about costs, deliveries and end results and finding a top selling erp software is also a tough job.
2. Mapping the concerns onto the presentation
One needs to make a presentation with the issues that confront the prospect mapped into the presentation. This means some work, some addition and modification of the generic ERP software presentation of the vendor.
3. Confusion created by various vendors
IT industry is famous for hype creation and throwing up new buzz words every now and then. Concepts are tossed around as actual solutions. This creates confusion in the mind of prospect. Challenge is to bring the prospect out of these confusions without making him feel ignorant about the reality.
4. Explaining myth vs reality
One needs to separate myth vs. reality with all due respect to prospect. Myth about the end result, myth about ERP software implementation being a short term affair, a click on/click-off affair or a panacea for all ills. One must explain that ERP implementation is a partnership and not a responsibility of the vendor alone where customer can sit back till he/she is handed over the keys to the new structure! Most of the ERP software implementation fail due to this misconception.
5. Technology vs Usability
New technologies offer so many varied options that they look very attractive to the user and he/she gets blown away. But, vendor may not explain that many of these would require vendor support at a cost. These are shown as off-the-shelf facilities that require no user skill, which is far from truth. There are options that mean nothing in actual usage, or such that their set up would make software usage very complex. Specially in new user organization, software has to be simple and easy to use.
New technologies also allow very good cosmetics onto the ERP software. A new vendor may be good on such a cosmetic show but low on depth of ERP understanding. Thus, user may end up buying a flashy car with defective engine.
6. Understanding customer mindset – brand vs. functionality vs cost. Trade off between brand-functions-cost
Here again, there is a challenge for the vendor to bring the prospect to a trade-off between brand (meaning paying high premium for name, paying for functionalities that the organization does not require) and the cost. A prospect may say, there is no budget constraint for buying ERP software, but in reality there is always a trade-off between budgets and value of the software in terms of actual delivery of requirements.
7. Real decision maker vs. Shadow decision makers – challenge of finding the real one
There is a gap between the expectations of line-user, middle tier user and the top management. Ultimately, ERP is the tool for management and not the line user. Line user has to make vouchers – on what media is immaterial. Based on where and how the entry is made, the top management will get results out of the ERP software. ERP is a tool more for the management than for the line-user. Thus, the presentation of the ERP software varies hugely depending on who is looking at it. Thus, vendor representative must take care that he/she reaches the real decision maker of the organization to understand his/her requirements and building an equation with this person, else one may end up working on people who have no relevance in final decision making or making a presentation about how to use the ERP while the decision maker may be more concerned about the final outcome and reliability of the ERP vendor.
8. Presenting the solution in the context and language that customer wishes
Every organization has a culture and working idiom. The vendor representative needs to absorb this and make a presentation that gels with their culture and working style. Only then can he create a positive impression that may lead him/her to the final closure.
If the buying / selling of an ERP software follows an honest and ethical effort by both ERP vendor as well as prospects, the implementation will be successful and deal will offer returns to both.
About the Author
Ratan Sharda is Chief Consultant with ESS. He has a rich industry experience of over 33 years, of which 21 years have been in IT. His domain since last 15 years has been ERP. He brings along with this his years of rich experience in textile manufacturing and marketing, dairy, packaging, publishing and printing. He is a postgraduate in Economics from Mumbai University , having graduated from St. Xaviers College.