Summary: Enterprise resource planning (ERP) solutions are broad applications that improve productivity and reduce costs across the entire back office. This article takes a look at the expansive reach of an ERP system – from A to Z.

Getting the Best ERP Deal Isn’t Easy

You’ve done all of your research, evaluated multiple enterprise resource planning (ERP) solutions, and selected the vendor and package that are right for your business. 

Just when you thought the hard part was over, the time comes to jump head-first into the negotiation process. But, getting the best possible ERP software at the best possible price isn’t as easy as it sounds.  Your sales rep is a negotiating pro – after all, it’s what he does for a living. 

But, you too can negotiate with the best of them, and get the most value for your money.  Here are some tips to help you negotiate the best ERP deal.

1. Where do you start?
All ERP vendors expect to negotiate, and most of them will attempt to begin discussions by quoting you a price directly from their price book.  But, keep in mind that many providers have already over-inflated these prices, so they can quickly offer a small standard discount to appease the customer.  Don’t be fooled by this tactic.  Find out what the vendor’s standard discount is.

This can be accomplished in a few ways – you can poll any industry analysts you’re working with, or ask the vendor’s customers during the reference check. Then, use this discounted price, not the list price, as the jumping off point for your ERP bargaining talks.

2. Don’t stop talking to other vendors.
Don’t give your sales rep the impression that the deal is a “lock”.  He is likely to be far more generous if he thinks there is a good chance he could still lose your business to a competitor. So, continue to evaluate other ERP solutions. And, make sure your sales rep knows that the lines of communication remain open with other ERP vendors, and that price may be a crucial factor in your final decision. 

3. Don’t be swayed by free stuff.
Many ERP vendors will offer free features or modules in lieu of a price discount. Unless these are on your original list of requirements, do not take the bait. This is often a ploy to gain stronger market share for an underperforming product, or to get rid of products that are soon to become obsolete. 

4. Serve as a reference.
References are like gold to an ERP software vendor, and your sales rep will be willing to pay dearly for them. 

By offering to advocate on the company’s behalf by serving as a reference during future sales calls, participating in published success stories, or speaking to the media, you can put yourself in a great position to negotiate a sizable discount. Remember, though, that this commitment will be outlined in your contract, and will be legally binding.  So, check with your communications or legal team first, to make sure these types of activities don’t conflict with corporate policies. 

5. It’s not just about the software.
When negotiating your ERP deal, think beyond the software. You may also need business consulting, maintenance, or training. Pricing for these are not set in stone, so be sure to push for reduced fees for these add-on services.