Every industry has its black sheep. So how do you filter out those in the enterprise resource planning (ERP) implementation line, and avoid derailing your ERP project?
Counter-intuitive as it might seem, business publications like Inc. magazine all point out the importance of trusting your instincts when making business decisions. Gut feelings can be a signal to probe deeper and explore why you feel that way.
That’s the first step.
You’ll then have to back up your instincts with your own observations. For example, notice how they behave when you request customer references – it can be telling not just about customer satisfaction, but about the state of their business.
It also helps to measure these observations against the experiences of others.
Having been in the industry for 20 years, we’ve witnessed how the black sheep fleece businesses. Among them, these five tactics are the ones you should look out for if you want to avoid going over budget or ending up with problems unfixed years later.
The Five Shady Sales Tactics of Shady ERP Implementation Consultants
1. Shady ERP Implementers Offer Bargains That’re Too Good to be True
If you get a bad hunch about a quotation that’s say, 50% lower than competing ones, you can trust your gut feeling about it.
A "bargain" like that is almost certainly too good to be true.
Unscrupulous ERP implementers employ many tactics to keep their costs low – often at the expense of long-term quality service to their customers.
Some creative tactics include:
- Flying in cheap freelancers from developing countries on tourist visas to deploy your project. While this saves costs, it usually leads to inconsistent deployment quality, and a lack of follow-through and accountability
- Selling ERP software licenses that aren’t legally considered as ”customer licenses” according to the software developer's terms. This leaves you with little legal recourse if the dodgy implementer closes shop and flees by night
- Under-quoting the real scope of work, only to lock you in with higher rates for any future updates and services you require
In short, when in doubt, stick to your hunches. If costs are still a big factor, then play it safe by visiting your shortlisted ERP implementers’ offices to ensure they have the right expertise to back their claims.
Also, be sure to inspect your quotation and contract details to make sure it all adds up.
2. Dodgy ERP Consultants Make Misleading Claims
If an ERP implementer boasts a five-figure customer base, don't take it at face value. Ask them straight how many companies they actually serve.
ERP software designed for small and medium-sized enterprises (SMEs) usually have a worldwide customer base that ranges in the tens of thousands.
NetSuite, the number 1 Cloud business software in Singapore for example, is used by over 40,000 organisations and subsidiaries worldwide.
Note that these figures refer to the total number of companies using the software as reported by the ERP software’s developers (e.g. Oracle-NetSuite).
If you come across an ERP implementer touting a similar figure, chances are they’re trying to pass the ERP developer’s figures off as their own.
Consider it a warning sign that they may not be giving you the full picture, and be on the lookout for other dodgy tactics involving say, customer references.
If you’ve doubts, ask them straight about the number of companies they serve.
That said, newer implementation consultancies without a sizeable customer base might use the developer’s figures as a temporary marketing strategy.
3. Unscrupulous ERP Implementation Consultancies Won’t Offer Recent Customer References
Always ask for recent references.
Consider it a red flag if the ERP implementer’s sales representative can’t provide you up-to-date customer references (or any at all) on request. You should expect reference letters no more than a year old.
Customer satisfaction aside, this could possibly mean that the vendor hasn’t had any business in a while. If you’re looking for an implementer who’ll be around in the long-term, take a closer look.
Finally, make a mental note of it if an ERP implementer claims they’ve experience with your industry, but supplies you references from big brands in unrelated industries anyway.
4. Shifty ERP Implementers Recycle Testimonials from Other Implementers or Publish Anonymous Ones
Does that success story sound familiar?
On a related note, pay attention to the success stories or testimonials on an ERP implementer’s website.
Because ERP software success stories are publicly available, an unscrupulous ERP software partner might try to get away with (not-so) subtly passing them off as their own.
If these success stories are mostly anonymous, take caution too. A “smarter”, but no less dodgy, consultancy might try to re-package existing stories this way.
More importantly, an attempt like that to stop you independently verifying testimonials should set alarm bells ringing.
5. Dodgy ERP Implementers Push their Product Instead Of Trying to Understand Your Business Challenges
Every good sales representative knows it’s the benefits, not the features, that count in a sales call.
If you’ve requested a demonstration with specific expectations and features you want to see but get a cut-and-paste presentation instead, take this as a warning sign. It’s possible they’re secretly aware that the ERP product doesn’t quite fit your business.
A good ERP consultant should demonstrate how these features work to solve your challenges. For example, how it might help you reduce time spent on consolidating invoices, improve data security, and so on.
Shady ERP Implementers Have Their Tactics, So Be Aware
In summary, unscrupulous ERP implementation consultants tend to make misleading claims about themselves, push their product (not its benefits), and offer too-good-to-be-true bargains.
Think you might’ve just encountered one? Listen to your instincts, then back them up with further observation. Be sure to scrutinise all documents including legal agreements and bills, as well.