I had the opportunity to speak about "Software Selection" at START-IT magazine's M2M/Manufacturing Days conference in Chicago last week. The basis for my talk was the points I have been and will continue to highlight in this blog.
At the end of my talk, there was an opportunity for a Q&A. Here are some of the more interesting questions from that discussion.
1. Within the talk, I encouraged potential customers to be forthright in the process. I was asked how much it puts the potential customer at a disadvantage by being completely forthright.
There are several aspects to being forthright. First, if there is no project or a given vendor is not going to be given further consideration, it is in everyone's best interest to have this information disclosed. As a sales person for TGI's Enterprise 21 ERP software, if I am trying to follow up with a potential prospect, I would stop attempting to do so if I'm told that the project is dead or that TGI is no longer going to be considered (though I'd like to understand the rationale).
Second, in a previous experience, we've worked with a customer that was on a tight time frame for implementation. All interactions with the customer prior to signing contracts were off-site at their consulting organization's facilities. However, what the customer didn't inform us was that they had no internal operations, and that they were concurrently transitioning from an outsourced operation, hiring new staff and supervision in this functional area, and implementing our software concurrently. I assume the customer may have felt we and other potential ERP providers would have been scared off by this combination of circumstances. However, we certainly could have provided them with a more accurate expectation of the implementation process had there been a complete "truth-in-lending" discussion.
Third, relative to financial negotiations, I am involved in virtually all contract negotiations with new TGI customers. Some may feel that if they "play poker" during the process of preparing for and negotiating the contract, they will get a superior result. My negotiation style is one where I am much more willing to work with new customers who are open and honest - laying out what they need to make things work and achieve a win-win relationship, vs. ones attempting to play hardball while pulling all of the levers in the contract in their favor.
2. One participant in the crowd described how they had attempted to work with two very large, well-known ERP providers. The first organization suggested the given customer should sign a contract for a smaller number of users than they actually would implement in an attempt to have its software licensing fall in-line with the customer's budget. The customer informed that vendor they would not do this, as they were a business of high-integrity.
This customer then negotiated a contract with the second vendor. In this case, there was some functionality committed to by the vendor as included within their applications that in reality required a third-party solution to enable (which was not disclosed to the customer). When this was discovered, the vendor told the customer they would have to buy the additional third-party software, which was unacceptable to the customer. The customer asked me for advice in what they should do in this situation.
I encouraged the customer to attempt to work through things directly with the given vendor. Once this process was exhausted, if they were unable to reach an equitable solution with the vendor, then they would potentially need to seek legal counsel for potential resolution.
There was some further discussion about Cultural Fit. My point during the talk was that while a software vendor may have the ability and willingness to customize its software to more closely align with the customer's requirements, the likelihood that the vendor would change its corporate culture to more closely align with a new customer's culture was highly-unlikely.
Dan Miklovic, Vice President of Gartner Inc., who facilitated the session, further stressed that once customers get down to their short list and perform final on-site demos, while many continue to try to reach a purely quantitative conclusion, ultimately it comes down to Cultural Fit - deciding which of the vendors the customer feels most comfortable moving forward with.
I've had this same type of conversation with potential customers, and many continue to insist they will reach a purely quantitative conclusion. However, pretty much any of the potential vendors in the finals will reach roughly the same level of fit with the requirements (assuming a sound evaluation process). Ultimately, it comes down to which vendor the customer feels most comfortable doing business with for the long-term.
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