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Selecting Business Software #4: Do It Yourself? You Might Be Able To

Many clients like the idea of "do it yourself" software implementation. After all, industry studies show that between 1 and 4 times the cost of the software is invested in services (customization, implementation, training, etc.). Saving that money looks pretty good, and sounds even better.

In reality, ERP software is complex. It generally takes one full implementation for someone to figure the general functionality out, and several more for a consultant to begin to understand the true abilities of the software. This is in addition to weeks of training and staffing the call center. Until then, there are many mysteries in ERP software. How exactly does pricing work in this scenario? How can you get the sales tax report to come out like you need it to come out for TN sales tax? Is it possible to calculate TN sales tax (including the 2 tier, $3200 per item limit) with this software? Will that even matter?

When you get into specific features, you need to understand both the business and accounting implications of things. What exactly does backflushing do? What if I use LIFO and backflushing? How are items relieved from inventory if I purchase them and tag them for a particular job? Do they go through inventory? Do they affect average cost? And on it goes...These things are only learned through years of experience...even knowing to ask the questions, or that there may be issues requires experience.

And then there is the matter of add-ons and customization and modification. All-in-all, it takes years of experience to understand ERP software.

If I'm ever responsible for implementing ERP software as a CFO or CEO in another company (and I plan to be at DGG for a long time; someone else needs to clean out my desk), believe me I'm hiring a consultant to do the dirty work. And the first questions I'm going to ask are: How long has the lead consultant been implementing software? Will I be able to get hold of her or him when I have a question, no matter how simple? How long has the least experienced person I'll be working with been implementing software? How closely will that person be supervised? Do I have an option to pay more to get a more experienced consultant if I want to?

I've seen a few companies do-it-themselves. Generally, they spend more trying to straighten out the mess later than they would have spent getting assistance in the first place.

Kinda reminds me of that time I was going to paint the house....

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This page contains a single entry from the blog posted on December 7, 2006 3:17 PM.

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