I trusted your sales team…
You did everything right. You sat through the demos, answered the questions, checked the references — and still ended up six months into an implementation wondering how you got here.
The sales process for ERP is fundamentally flawed… and the only person that can fix it is YOU!
A Peek Behind the Curtain
ERP vendors are in a tight spot. They have a lot of external pressure to maintain high growth rates. Software publishers share leads with their partners and have account managers who measure the VAR’s performance in closing those leads. Performance incentives are offered by the software companies when certain growth metrics are hit and these can be material to a company’s financial performance. PE ownership groups pressure leadership teams to build long-term enterprise value through recurring SaaS and support contracts. These revenue streams drive higher EBITDA multiples of goodwill when the companies flip.
Along comes a manufacturing company struggling under the strain of their success. Growth has been strong for years, additional sites and facilities are operating, more and more challenges are presenting themselves with systems not talking to each other, manual processes everywhere, and a million vendors trying to sell themselves and their products to solve these problems… they are easy prey for these experienced lions.
It Starts With the Sales Process
Most ERP vendors use a structured sales process. This qualification and selling framework is designed to qualify and close a deal. Have you ever heard a salesperson ask about your pain points? That is one of the steps. Customers buy ERP software based on emotion, and salespersons are trained to focus on these areas. It doesn’t stop there; software demonstrations are tailored around the issues you share in the sales process. The result? By the time you reach the demo, the vendor knows exactly what to show you and exactly what to avoid.
The Demo Problem
Modern ERP systems are genuinely impressive. The dashboards, reporting tools, and configurability can make any demo feel like a solved problem. That's exactly the danger. Clients get dazzled by features and six months into implementation, realize they bought the wrong software for their business.
Here is a real-world example:
Client: “Will this software allow employees to clock in and add labor to an operation?”
Salesperson: “Absolutely! No problem.”
Three months later…
Implementation consultant: “Just scan the job number, then scan the operation number, then scan the employee number, then scan the start job option.”
Client: “That takes way too long. I can’t have my team lined up waiting to enter a bunch of scans.”
Implementation consultant: “What you really need is this add-on from XYZ. It makes scanning a lot faster. Almost all our clients buy it because it isn’t very expensive and integrates well.”
One month later…
Client: “How come this new add-on isn’t allowing more than one operator to clock into an operation. I told your salesperson how we run this business and they said this wouldn’t be a problem”
Implementation consultant: “Unfortunately the software doesn’t allow multiple users to clock into an operation. It’s on the road map for next year. I’ll ask our PM to get a customization quote going for you”
Client:
So whose job is it to prevent this? Ultimately, yours.
Only YOU can Plug the Discovery Gap
Your interactions with the sales team are not enough to capture your full requirements. Salespeople do not know or implement the software; their training is sales focused. You may be thinking: “Isn't that the sales team's job...to ask the right questions?” Here is the issue, the questions being asked by the sales team are to try and disqualify a prospect early so time and effort aren’t wasted in the sales process. They aren’t asking the questions to protect you from buyer’s remorse six months from now.
Often the team that demonstrates the software and does the discovery is an outside party that specializes in professional demos. They get assigned e-mail addresses from the implementation partner to 'appear' as though they are part of the company that is representing the product. You build rapport and share knowledge about your organization with the demo team and sales teams, but once you agree to the implementation the sale quickly transitions to a project team who is completely unfamiliar with your company. Weeks and sometimes months of information from discovery gets consolidated and communicated to the implementation team in under an hour. In short, things get missed, important things. Not because of the people, but because of the inefficiency of the process.
After project kick off, the implementation team begins configuration by asking the same types of questions that were already answered in the sales process but didn't come across from the sales team. It can be very costly and frustrating for the client who wants to get going on the project but needs to use their team's time up again to do a repeat of the discovery. On rare occasions the implementation team is tasked to cover a huge gap between the out-of-the-box product versus what they client actually needs. Implementation teams dread this and work hard to minimize the impacts. Only you as the client are in a position to prevent this problem by requiring a good discovery.
What Makes a Good Discovery?
Improving a discovery starts with ownership. As a business owner or leader, you need to own the outcome and that means demanding more from the process than a vendor-led Q&A session. Owning it means demanding deeper, more thorough demos, and insisting vendors come on site with implementation consultants to see how your business runs and what you want to get out of the implementation. Good discoveries:
- Should take 4-8 weeks for mid-sized companies
- Include internal stakeholders from each site, product line, or any unique or specialized process
- Involve end users (yes, end users)
- Include leaders from Finance / Operations / Purchasing / Sales / Engineering / QC etc.
- Include shop floor walkthroughs and direct conversations with operators
- Include a ‘devil’s advocate’ for each session to challenge group think
- Include your vision of the future, not just how you do things today
Beware of Tribal Knowledge
The last thing to watch for is tribal knowledge. We all have it in our companies, and most of it is unwritten and in the heads of those getting it done day in and day out. All the spreadsheets and informal processes that run your business need to be surfaced or the ERP will be built around an incomplete picture of how you actually operate.
To surface these, have the implementer come onsite and conduct process mapping sessions (record these) with both a trained lean consultant and one of the implementation consultants that will be on your project. Do this before you finalize the purchase of the software and services. Use the report from the process mapping to discuss the findings with your team.
This deep scrub reduces your implementation risk and better aligns your expectations with those of the team performing the work. It identifies software add-ons you may need and areas where customization or integration work will be needed. This helps the project manager build a realistic Gantt chart and helps you get a more realistic estimate of costs. If you identify major showstoppers, you can continue the process with another software/vendor and still get value out of the money spent on the process maps.
Use the Process Map Gaps for Negotiation
Here's something most manufacturers don't realize: by the time process mapping is complete, you hold significant leverage. At this point the vendor is champing at the bit to close. Any gaps, missing functionality, or required add-ons identified in the mapping process can be used as leverage in the final software and services agreement. If customizations are needed, lock in standard consulting rates rather than premium developer rates, negotiate fixed costs for development upfront, and require the vendor to upgrade any custom code at no charge with each major version release.
In summary, don’t make these purchase decisions in a silo. Force the vendors to get deep into your processes, check references from similar companies that have used that vendor to implement the software, and ensure you see the software perform all the critical, high-volume functions your company needs.
The trail to a successful ERP starts with knowing the terrain before you take your first step. Trail Guide has walked this trail. Give us a call.
