The ERP Resellers Guide to selecting the right ERP Software Vendor

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1 The ERP Resellers Guide to selecting the right ERP Software Vendor

2 Introduction ERP Resellers have been the recipients of not only a difficult economy but also an industry that has been in flux for a number of years. Since Oracle gobbled up PeopleSoft in 2003 all the major ERP Software vendors have undergone considerable change. This change has occurred primarily in the mid-market because of the maturation at the high-end, which has driven vendors to seek opportunities in the lesser developed mid-market segment. Vendors have been forced to specialize and focus on primary vertical industries and solutions. Much of this specialization has resulted in acquisitions where larger vendors have consumed smaller, more focused providers so that they can fast track their penetration of the mid-market. Many Resellers have forged solid relationships with a chosen ERP software, and woken up in the morning only to find out that they were now in partnership with a totally different type of company. Yesterday they were selling one product, but today that product is no longer the primary focus or one of many product their vendor sells. Yesterday they had a relationship, but today they have to start building a new one with a new company. Yesterday they were a key player, today they are now one of the small fish and not part of the new strategy going forward. An article by Renee B Ferguson of Ziff Davis Enterprises entitled ERP Roulette, describes what mid-market companies are faced with today: the dramatic upheaval in the business applications market is forcing mid-sized organizations to make some tough, long-term choices about suppliers. These are nervous, career-defining moments for enterprise resource planning (ERP) software buyers. The same holds true for ERP Resellers. It is not uncommon for an owner of an ERP Reseller organization who has bet the business on a specific ERP software vendor to find a situation where their software supplier has been sold in the merger and acquisition frenzy, sometimes more than once. What ERP Resellers are faced with Resellers in today s business environment must face a new fundamental question: Whom do they place their bets with? Surely, given the option, Reseller s would elect to bet on the software vendor who s committed to the channel, the vendor they can build their business around. In the mid-market ERP sector many of the applications available have competitive parity. They offer much of the same features and functionality. Some have specific differentiable functionality in that they have focused on specific super verticals where they have developed deeper core functionality around those industries. For example, SYSPRO supplies a comprehensive fully integrated ERP application for mid-market manufacturers and distributors. While this effectively covers most industries and most manufacturing models they do have a heightened focus on the food, medical device, machinery/equipment and electronics industries, and have developed solutions specifically for those verticals. Were there is a vast difference between mid-market ERP software products, is in the underlying technology that has been used. Some vendors have made very good strategic forward focused technology decisions. They have built their product around technologies such as; Service Oriented Architectures (SOA), business objects and web services, giving the ERP Reseller as well as the end customer a large amount of freedom to leverage not only functionality but also the embedded enabling technology. These technologies allow ERP Resellers to better serve customers and enhance life-time-value and overall customer satisfaction. Many vendors talk the

3 technology talk however when you look under the hood its not really there. This can cause problems when too many promises have been made during the sales cycle. Identifying the Software Vendors that do have the latest and greatest technology can be difficult, but it is a critical area that needs consideration. It is always great to have a product that sells well, but after the sale, ERP Resellers have to get the customer implemented and keep the client happy. A real tangible benefit exists when a Software Vendor is committed to providing not only the training but also the tools for implementation. Many vendors don t have comprehensive implementation methodologies and strategies. Going into the new decade Software Vendors that don t have this fundamental implementation tool-kit and have not started adopting Enterprise Analysis and Modeling, Process Modeling and embedded Workflow, may have problems competing when these methodologies become an expected out-of-the-box deliverable. But what is the real differentiator in a sector where the ERP software product has become more and more commoditized? The Real Differential The real differential is in the strategy, culture and track record of the ERP software vendor that you may be selecting. Resellers must look at the vendor s long-term track record. How long have they been selling their product through a Reseller channel? How many times have they flipflopped between selling direct and selling through a channel? How many times have they down graded a product line, done a merger or made an acquisition? What is their attitude towards serving the Reseller community? These are softer issues but they, along with what the Reseller feels about the culture of the company, are attributes that Resellers have to consider in today s changed environment. I have prepared this article with a specific focus on the intangibles as described above. And yes, it s about making money, because you can have the best product to sell, but if your supplier is eternally morphing, changing, selling out or altering its strategy you do not have a hope of building your business. It is every entrepreneur s dream to build goodwill and equity and grow their organization into a profitable, viable, maturing asset. Resellers have to rely on their software vendor to assist them in building their business by providing a sustainable, long-term, dependable supply. It s no different than having a retail store if you cannot get product into the store you cannot sell it to customers. In the new decade software Resellers have to look at the many tangible real attributes of the product they decide to adopt and promote, however the real differentiation has to be focused at the softer less tangible attributes of a software supplier. They have to consider factors that are not necessarily on a balance sheet or in the software manual as functionality. They have to do this in order to build their Reseller organizations and make money to ensure that the product and software partner they select can support and in fact enhance their business objectives and goals.

4 Software Vendor Selection Checklist In my view here are the ten important factors to consider when selecting an ERP Software Vendor. Some are hard traditional values that we always have to look out for, but many are abstract traits that have become essential to the long-term health and sustainability of your business. 1. Recurring Revenue Always select a vendor that has a business model that supports annuity income and recurring revenue. You want to benefit in the long term from the sale you did today, as long as you are still dialed into and committed to the product. 2. Revenue Strategy Choose a product that supports the incremental income of your business. The reality is that software vendors make money-selling software and Resellers make money selling, implementing and supporting software. Don t choose a product that does not require implementation and support. Find a vendor that supports its Resellers in supporting its product. 3. Relationship Select a software vendor that is committed to relationships. Is the President or CEO of the company accessible and committed to the Resellers from the start? Choose a vendor that openly, publically and literally takes pride in its relationships. Are these relationships evident in the way they do business? Do they allow or disallow Resellers competing on the same deal? Look for the nuances that indicate that the organization does what it says it does. 4. Longevity The vendor that you want to build your business and wealth around needs to have the legs to be around as long as your ambitions. Verify how long the vendor has been in business and how many product line s they have. Get a history of their growth and make an effort to inquire about future plans. You are about to have a relationship with this company talk to them and make sure you are comfortable with their growth strategy. 5. Specialization/Vertical Focus In order to be successful you have to be a specialist. Selling a generic product may pay the rent but will not deliver exponential profits. Select a software vendor organization that has a specific focus on a manageable number of industry verticals. Hang your hat on their expertise and turbo charge your push into these lucrative vertical focuses. 6. Flexibility Building businesses takes years, not days. External forces and business environments changes over time, so your supplier must be flexible and willing to work with you over many years to help grow and build your business. Make sure that the vendor you choose has a sustainable history of working with Resellers that have been successful. Ensure that the environment that you select is geared to supporting your long-term business goals. 7. Commitment Does your ERP software vendor work with you to close the deal? Resellerfocused vendors have programs that provide you the sales resources to assist you in closing a deal. Ensure that this assistance does exist. Make sure they provide training and boot camps, have 24x7 online learning and have consultants and technicians to support your selling and moneymaking efforts. 8. Value A product that does not deliver value cannot be sold. Look at the vendor s product as well as your products and additional supporting services, and visualize the marriage working effectively. Be comfortable that your customers will derive value from the product and the product supports your income stream. 9. Reward There is no benefit if there is no reward. Select a software vendor that rewards its Resellers for exponential business.

5 10. Synergy Make sure there is synergy between your company and the software vendor organization. Do you have similar cultures, values and preferred business practices? Make sure you feel comfortable with the relationship as it develops? Ensure it is a company that you want to do business with over many years? Conclusion Simply stated, this business is about having the best product and the best technology to sell. It is about having the back up, training and assistance to market, sell and support the products you have selected. But it is also about being happy working with the organization that you elect to work with, about feeling comfortable that your partners will become friends and will be around as long as you need them. This is imperative to avoid having to force you to change your business and cost you money. To find this type of software vendor is a huge task; they are few and far between. What if I told you there is a company that has been around for over 30 years? That sells the latest and greatest, Microsoft based technology? That has competitive parity as well as proven differentiable functionality? That believes in revenue strategy and the recurring revenue business model? That is specialized and has a business built on relationships? That is flexible and for over 30 years has been committed to its Reseller channel, and that they believe in the value their product delivers and the concept of rewarding partners for the effort they have expended? That company does exist. It is SYSPRO. Since its inception in 1978, SYSPRO has been delivering state-of-the-art business solutions to some of the world's leading companies through its professional and successful world-class Reseller channel. As a leader in the delivery of world-class ERP software, the company now caters to the specialized needs of over 14,000 licensed companies in more than 60 countries. SYSPRO is a fully integrated business software solution that provides complete control over the planning and management of all facets of business including accounting, manufacturing and distribution operations in a variety of industries. For additional information on SYSPRO, call or visit us at

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