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10 Ways to Strike a Smart ERP Deal

Posted on Wednesday, June 01, 2005 12:00:00 PM                                  Digg This Article   Add to Delicious

After the last few years of nuclear winter in the enterprise software marketplace, ERP vendors, still feeling feeble, are beginning to see the spring thaw. "Vendors are anywhere from anxious to desperate to sell their product," says Jim Shepherd, senior vice president, enterprise applications, AMR Research Inc. (Boston). "It is absolutely an ERP buyer's market."

Here are the best strategies that mid-market companies can adopt in order to get a good deal on ERP software that will carry through to the next decade and beyond:

    1. Recognize your value. The typical manufacturer now keeps an ERP system for 20 years or more. "The vendor has a long time to extract money out of that relationship. They tend to be much more aggressive in discounting the software to get the deal done in the first place. They have yeainstallations can expect discounts of 20% - 25% off the software license list price. The largest companies can command discounts of up to 70% or 80% off list, but that's because they're spending so much more overall. The discount size is relative to the amount of potential value the vendor sees from the lifespan of the relationship.

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