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Your company has decided to purchase a new business system - it could be accounting, warehouse management, manufacturing, CRM, QA management, Service management - it really doesn't matter.

What you are able to figure out, pretty quickly, is the price of the software and the price of the annual maintenance (if you are installing on-premises) or the monthly subscription price if you are doing a rental software-as-a-service solution.

What is much harder to figure out is how much consulting do you need. And you will need some. Even the smallest organizations benefit from help in setting up and configuring the processes for a $65/month package. For larger organizations with dozens to hundreds of users, the price of consulting can rapidly eclipse the cost of the software. But by how much?

 Factors Affecting Pricing

How do you know when you are under-buying or over-buying consulting services?

If you are under-buying them, you are setting yourself up for change orders or cost over-runs. If you are overbuying, you are spending capital you could be putting to other productive uses.

The software implementation partner you choose to work with is a big factor in the professional services purchase, but they are not the only factor. And believe it or not, the partner is not the single biggest factor in the success of a project. You are. Your organization and the self-assessment, engagement and commitment that you bring to the table are the biggest factors in an implementation's success. In fact, according to the Standish Group, 19 percent of all small and medium business IT related projects fail and the number one reason for failure is lack of commitment from executive sponsor of the project.

For the sake of this discussion, let us assume that you have properly vetted the software implementation partner you are going to use for the project. They should have great experience working with the product you are asking them to implement. They will have a methodology for assessing the needs, implementing/adapting the product to your needs, a way of managing milestones and steps, a change-request process and they will be able to explain this all to you in a clear manner.

So now that we know we have a partner in this process that we believe has the knowledge to be successful for us, we have to ask "what is our organizations contribution to the success?"

To figure that out, let's look at those three factors mentioned above (self-assessment, engagement, commitment) in more detail.

  

Self-Assessment:

Before undertaking a project for any type of business system, you have to take an honest look in the mirror. You have to have a clear understanding of the abilities and availability of your staff that will be running the new system. This means their technical abilities to run the product, their skill abilities to do the job they have been doing in a new way and (maybe most importantly) their willingness to change. Consider that your IT deparetment may have the technical skills with SQL database and IIS Web services but they probably not have the skills to implement opportunity management, define sales process work flow and design the best executive decison dashboards. So the lower the staff scores in these areas, the more consulting, training and hand holding your company is going to need in the implementation and hand-over process.

 

Engagement:

This has a great deal to do with time, intent and organizational culture. Is your staff so busy that they will not have time to be engaged in the analysis and implementation process in any meaningful way? Is the intent of the system to be able do more business/better business with the same people or do you intend to reduce headcount with the new system- your people are probably smart enough to figure out if you are replacing them with systems. And finally, what is your organizational culture when it comes to change and systems? Was the staff involved in the selection process or did they request the change, or is it being forced upon them. All these questions have a direct bearing on how engaged the actual system-users will be in success the of the change process. The less engaged your team is with the project, the more consulting and project management services you will have to purchase to make the project successful.

 

Commitment:

Executive management has an enormous role in the success of a business-system project, even though they may not ultimately use the software or system. Is the executive team committed to making the change - regardless of the short-term pain that all change brings? Is the executive team committed to using the system - or will it allow the system users to create their own work-arounds and spreadsheets (or ignore it completely) when something doesn't work "the way it used to"? Without executive commitment to the project, the likelihood of success, regardless of the amount of consulting services you purchase, is doubtful. 

 

Before you make decisions on which product to use and which partner to use in implementation, take a good, long look at your organization and the factors mentioned above.

If you are already in the evaluation and purchase process and have two quotes from different implementation partners, ask yourself why they are different. What did they see in your organization as risk factors that had them quote a higher consulting dollar amount?

 

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