HOW TO: Compare Software Vendor Quotes

When on the market for a new ERP software solution, small business executives tend to get confused and overwhelmed with the many quotations they receive after viewing tons of system demos.

Doing the proper research is key to finding the right ERP system that matches your business needs and requirements. However, reading the many vendor quotes can be daunting. When it comes to an ERP implementation, there are many phases and each phase comes with its own services and pricing.

Here are some common line items you will find in a vendor quote:

Planning & Design

• Pre-Implementation Consulting/IT Infrastructure Analysis

 

Development & Testing

• Hardware set-up (if on-premises software deployment is requested)
• ERP Setup (or Installation) Fees [System configuration & Testing included] – usually this is a one-time charge
• Setup fees of any additional modules required (such as EDI communication, additional Business Intelligence tools required, Warehouse Management System implementation)
• Data import from previous system – this is optional as importing data into ErpWizard can now easily be done by the user using Excel Spreadsheet imports
• Custom programming
• Integration to connect to other software programs (programs offered by different companies)

Deployment

• User-based Licensing of the ERP solution – usually monthly or yearly recurring charges
• Software licensing on any additional modules
• User training – typically a block of hours will be offered based on the vendor’s hourly rates

Ongoing Support

• Annual User Support & Maintenance Fee

 

What’s important after reviewing all the fees and ensuring it is within your company’s budget is to make sure you are then comparing apples to apples. You will see that some vendors like to list all the potential costs involved in this ERP implementation project and others only write up their base costs. It’s all about reading the fine print and knowing that you have every step covered and quoted when comparing different vendors.

Be aware that most often, user training costs are left out by many vendors. Without proper training, the ERP system will not be used as it should and the company will not benefit from the system’s advantages. Therefore if you don’t see it on a vendor’s quotation sheet, request to see this fee before signing. Never make the assumption that because something like user training is not listed and quoted, that it is included already.

On top of all this, don’t forget to ask all the questions you and your team may have about the whole implementation process and about what could possibly arise during this phase. Sometimes, even vendors cannot predict some unexpected events and extra charges will be applied. However, it’s best to know the vendor’s hourly rate if such a situation does arise so you can be at least somewhat prepared.

Finally, we recommend that you always ask for referrals of the vendor’s current clients to see how their implementation process was and if it finished on time and on-budget (and if not, why not? What situation arose during implementation and how did the vendor react or handle the unexpected events?).