Negotiating with your ERP vendor !!!

So you probably have zeroed down on your ERP product and also the consultant for the Implementation and you have got a quote to start with. You should have a couple rounds of negotiations before you agree to the quote, most ERP Implementers have a negotiation margin in their first quote and hence it’s advisable to take time to analyse the deal.

1. Consultation Charges

It’s very likely that your ERP Consultant/Implementer has over valued the consultation charges. They usually keep a healthy margin in this component because they expect their clients to ask for changes after implementation.

2. Over licensing

It’s easy to add on licenses later-on even if you under-license yourself initially. Don’t fall in the trap of buying more licenses during the initial deal even if it is being offered at a jaw-dropping price. You can’t do much with the un-used licenses as the cost of those will be included in your initial contract and you will have to pay for those anyway.

3. Understanding the timing

Timing is everything for ERP business. Sealing a deal during a quarter end is a sweet spot you can hit as all ERP Sales professionals are eyeing to achieve their targets and you’ll probably end up with a better deal.

4. Competition is a good thing

Always have at-least two ERP vendors in the final stages of negotiations and let them know clearly that you are interacting with someone else as well. This will make them act swiftly to your queries and they would always want to undercut their rival if they know it’s down to a couple of vendors only.

5. Understand the area of Expertise of your ERP Vendor

By any chance if you have selected an ERP vendor that doesn’t necessarily specialize in that particular industry then there is a good chance that they would be more than happy to take up your project at a zero profit so that they can break into the industry.