“Expertise, Attention, and Fit Always Trumps Size”
We often get caught up in the belief that bigger is always better. Bigger houses, bigger cars, and so on.
But, we often forget the concept of right size- the item that fits our needs, without complicating our lives. We do it naturally in many cases, such as clothes, food, furniture, and even some of our major purchases. Allow me a real life example. As part of my “brilliant” retirement plan over the last ten years I acquired several investment properties. They are all rented, and frankly by now I had planned that they would be sold at a nice profit. Enter the real estate bust of 2007-2008. So I am a landlord for the foreseeable future. In any event, at the beginning of my experience as a neophyte, when something broke, or needed replacement I engaged a big supplier. Sears, Best Buy, Lowes, ServiceMaster etc. were my vendors and disappointed me continuously, provided poor service and couldn’t care less about my little real estate fiefdom. But then, I started to look around for the small, more local vendor. I found Guy, my plumber, Joe, my A/C guy, Ron, my handyman that can do anything, and a small re-furbished appliance business. The appliance business is minority owned, small, and stands behind everything they sell as if their lives depended on it, because it does. I have all the owners’ cell phone numbers. If I am out of town, and something goes wrong, they are a quick call away, and they know all the tenants on a first name basis. And you know what? The fact that I have a residence and 5 rental properties is a Big Deal to them.
So maybe you think it is better and safer to buy based on size, number of locations, alleged cheaper prices, and only buying new. Been there, done that, and have the gray hair to prove it.
Over the years, when advising ERP buyers, I find that many of the buying decisions we make in our everyday lives also apply when selecting an ERP vendor. Fit is probably the most important criteria in selecting an ERP vendor. Let’s take a look at why below:
Complicated software- It is a known fact that the more broad software becomes, the more complicated it is. This is particularly important when matching your needs. Software that is designed for mega multi-national companies, or markets broader than Lake Michigan, have a super-complicated morass of settings and parameters that make it very difficult for an SMB to implement without some very significant assistance. Many of the functions are often not required by your business. There are even outside software and consulting firms whose sole business is to try to sort through the parameters and provide work-arounds to try to implement these “Tier 1” products. You need to ask yourself whether the large software vendor is better, or just better for more and larger markets.
Runaway New Technologies – Some software vendors, in their haste to parrot the latest buzzwords, adopt every new technology. These technologies are good for some, and a nuisance for others. The past is littered with technologies that did not provide true value to the business. Don’t be forced to adopt the latest fad, if it doesn’t fit your business. Make sure the technology fits you and your industry.
Small Fish, Big Pond- To re-enforce my real estate example from above, ask whether a business of your size and needs is important to the vendor? Or are you just one of 20,000? Can you call upper management and receive a quick response. If not, you are probably in the wrong pond. In purchasing, for example, it is not unusual to select vendors where your orders are important, and the benefits show when you most need them. Why would selecting a software vendor be any different? This point is extremely important. Think about it. Why do Multi-national companies such as Caterpillar, GM, Harley Davidson, etc. do business with literally thousands of small to medium sized businesses just like you? They are not concerned with your size. They want to be a very important customer to you so they will receive great price, quality, and delivery. Again, I repeat for emphasis, why would your selection of a software vendor be any different?
Expertise spread too thin- The second most important success factor in the implementation of ERP, is the expertise and experience of the support team. (The most important factor is the motivation of your team). Manufacturing is not something well learned from a book. Front line experience is key. Make sure your implementation team is not too inexperienced, because of the overgrowth of your vendor. If you wanted to sponsor recent college grads in gaining some on the job experience, you’d have hired them.
Invisible Existing Customers- Always determine the motivations of your software vendor. Are they a public company driven only by quarterly profits? Also check the activities and inputs that exist with past customers. Are there active groups and conferences? Do their customers still know their support people by name?
Telephone Support from Anywhere? Large international software vendors are also prone to use foreign telephone support, because it is cheaper, and can be housed in their foreign offices. Often, these people are under-trained and communication can sometimes be very difficult.
Fortunately, there are several good ERP choices for companies of all sizes and needs. It is important not to get caught in the trap of bigger is better, or one size fits all. You can have the correct fit and still work with a team that appreciates your long term business.