Cloud ERP Sales Traps To Watch Out For
With all the hype around Cloud ERP solutions, it is easy to get caught in some traps that sales people throw at you. We all want the newest stuff becauseit looks great, sounds great, seems to work great, etc. But like a car sales man, you have to ask yourself, what's the catch… there are plenty, as you might imagine.
Buying a new Cloud ERP system is a big and costly undertaking and should definitely not be rushed. Although this might sound humorous to you, approaching this decision is best done from the perspective you would have with buying a new car AND entering into chess match simultaneously. Let me explain.
One trap that is often used in selling Cloud ERP is to make you make a decision quickly to take advantage of some discount. Like chess, every move must be thought out and not rushed. When the sales team of a cloud solution tries to rush you into a decision, take your time. Why? Because the discount or offer they are presenting is for a short period of time, after which the price will increase. And since cloud solutions are ongoing, and once they have you it is difficult at best to break free, the price will go up dramatically.
One such example is an opportunity we were working on recently. The price of the competing software was typically about three times higher, but because the CEO was greatly influenced by a friend, they went with the competition, only if they could match our price which they did, coming down 73%. Two years later, the price went back up to the original price and then some. How would you like to pay two years at one price and then be told that your new price is now 400% more? Painful.
Another situation to watch out for is how the new Cloud ERP you are considering is priced. In most cases, the price is set and you are ready to move forward. But then you find out that you will have to pay more for a particular capability you thought was already included in the original price. On one such opportunity we worked on a few months ago, our prospect had decided to go with the competition, even though they cost "a bit more". During the negotiations for pricing, our prospect found out that if he wanted more than one unit of measure for his inventory, the price was going to go up. He was displeased. Then he was told that to have multiple companies which he needed was also extra, he decided to drop them and we earned his business… Why you ask? Because we were able to provide everything his company needed without any extra pricing at the end. What we told him at the outset was the price he paid.. No changes.
One last gimmick to discuss (there are many more, but we can talk about those later) is the concept of the maintenance plan. Some Cloud ERP providers have this included in the annual subscription price while the majority charge extra for it. This is fine if you are willing to pay it and if you know about it in advance. When you have gone through a couple or several months of the selection process and have finally made the best choice you can, you are ready to sign the documents. But at the last moment you notice that the price jumped 25% from what you were told. You ask why. "oh that's the annual maintenance fee for the software, and because you are a new customer for us, you have to start at the gold level". Of course the gold level is more than you need and now puts the solution way out your budget range. What do you do? Many people just accept it rather than go through the process all over again.
Annual maintenance fees are part of the Cloud ERP world, but they should be included in the price. Acumatica ERP is one of those and we represent them as partners. The annual maintenance fees are already included in the subscription, as well as a lot more, which is the subject of another blog.