Read our prior post here to understand how we got to this point, regarding a client who was 100% over budget and 100% over projected time frame when they called our firm for help, and how we proposed to solve their problem.
When our new client finally fired their previous reseller, they admitted to being in for about a quarter million dollars overall — on a $125,000 project, or so they were quoted. And by this time they were also about 20 months into their nine month project.
During a very frank conversation, we told the owner why we needed to do a Business Process Analysis. It boils down to our simple mantra: We cannot quote what we do not know. We explained the process, the people, the expected outcome, the detailed process review and summary report we would present to them, and the cost and time frame. I reminded him that his initial project was now $125,000 or so over budget – that’s over ten times the cost of the analysis.
Now, I was careful to explain… doing the BPA was not going to change a quarter million dollar project into a one hundred thousand dollar one (though our experience has shown that it will reduce the overall cost of the project by more than its cost). But my point was even simpler than that.
I said, “It’s not that your project isn’t a quarter million dollar project – in fact, it probably is. But… wouldn’t you like to have known that at the outset?” Bingo.
The fact is, by knowing the cost upfront, an owner can make a rational decision. Knowing the full cost going in, at least roughly, he or she can decide whether now is the right time to proceed. After all, it’s not that you don’t need good systems to grow – and this client was growing rapidly, thus putting a strain on all his cash resources. Of course you need good systems. But by knowing the true cost upfront, you can plan and budget accordingly. In the end, we believe the honest solution provider will win out – either sooner or later. It’s the only way to do business.
And here’s the thing: The type of analysis required to design an ERP implementation has to be done somewhere along the way. You can’t prescribe a solution without knowing the problem. But doesn’t it make more sense to do the analysis first, before you make any further decisions? Our client would have been well served by doing so. By planning on the fly as they did, they ran into constant modifications and change orders that ultimately doubled the expected cost of their system (and remember, they still weren’t “live”.) The owner probably would have waited another year, instead of straining his people and his cash resources on a project that was outside his presumed budget. He later confirmed this.
By separating the BPA from the rest of the work, you can make two decisions: the first is whether to proceed with the actual ERP implementation. The second is to determine whether the consulting team you’ve chosen to work with appears up to the task. And you can make both those decisions by making a commitment to a project that on average should cost only about $10,000 to $12,000.
Unfortunately, a lot of salespeople in the industry, we find, continue to tell customers what they want to hear. Customers don’t know. Technology confuses and scares them. They want to trust and believe their providers. As such, it is incumbent upon those of us who provide the products and services to give clients an honest upfront assessment of the scope of their project in both time and money. After all, you can’t make a $250,000 project into a $100,000 project and expect the same results.
But you can plan, phase and budget accordingly. You can create a win-win scenario. And you can ensure that both provider and customer sleep well at night. Not every night mind you – implementing a new system is always tough and fraught with problems and issues. But done right, eventually, everyone can walk away a winner.
The lessons of our story are simple and direct. The business process analysis is the only place to start. Done right, it requires experienced consultants doing detailed work who can understand the business side of your enterprise, study your workflows, and then make appropriate recommendations. Not everyone can do it, and if the price sounds too good to be true, well… then it is. It doesn’t have to cost an arm and a leg, but it is by definition a paid engagement that sets the groundwork and provides the roadmap for the real ERP implementation work that follows.
The BPA will provide that roadmap, and often, choices. It will tell you whether your project and associated wish list will cost $100,000, $1 million, or (likely) somewhere in between. It will tell you, at least roughly, how long to expect an implementation to take, what phases you might break it into, and what the costs of those phases might be expected to be.
And it will tell you all of that before you make a commitment to a project that you weren’t really prepared to make after all. In the last analysis, it’s the only way to go.
And the best way we’ve found in 25 years to lower the overall cost of your project.