In an early episode of HBO’s House of Lies, a client fires business consultant Marty Kaan (Don Cheadle) after he predicts disaster for their upcoming ERP implementation. He tips a friend to buy the client’s business when it goes bankrupt. Events play out exactly as Marty predicted.
The episode reflects historical truth: for even the largest organizations, few situations were more risky than an ERP implementation. Hershey’s lost over 100 million due to a botched ERP implementation. Nike suffered tens of millions in losses when its ERP system malfunctioned. HP’s rollout cost five times projections. Foxmeyer drug—the second-largest drug distributor in the United States—went bankrupt because of a botched implementation. And the headlines were just the beginning: some estimates put 1999 failure rates at 40% to 60%.
It’s a different world now. The ERP market has fragmented—customers have more options and, therefore, greater power than ever before. An array of new products implement at a fraction of the time and cost of on-premises systems.
Yet the ERP market remains a hazardous place for any organization. Old-world systems jostle against new models, and everyone wants to be cloud. Never has it been more important to assert your rights as a newly empowered customer.
Here are a few questions to ask potential vendors in your next ERP selection process.
1. Is your system cloud-based or on-premise?
2. If cloud-based, was it designed for the cloud or adapted from an on-premise application?
3. Where is your system hosted, and by whom?
4. Does your software have a multi-tenant architecture? Are all of your customers on the same logical instance of your software? If not, how many customers do you serve on each logical instance?
5. Are we as an organization responsible for anything that happens to our data? Will we as customers have to buy separate consulting services in order to fix problems in your software? Or will you take responsibility for fixing bugs? If we want to move to another system at some point in the future, will we have full access to our data?
6. Will we have to pay for updates? How much will they cost? How often do you upgrade your software?
7. What is your system’s up-time?
8. Will the system support our core business needs out of the box? Do you handle modifications through configuration? Or will we need to pay for customization?
9. What restrictions limit our access to your system? Are there certain databases, operating systems, browsers, devices, or platforms that your system can’t run on?
10. How many years have you been in business?
11. Are you profitable?
12. Describe your consulting resources. How many full-time consultants do you employ? What qualifications do they have?
13. How many customers do you serve? What percentage of customers do you retain on a yearly basis? What percentage of customers have you retained since your founding?
14. What proportion of customers are in our industry? Can you provide references from organizations similar to ours?
15. For how long does your contract mandate that we use your software? Will we be able to read the fine print of your customer contract before it’s time to sign?
16. What is a typical implementation time for an organization of our size?
17. Who will handle the implementation and? Will you use an implementation partner?
18. What methodology do you use to ensure a successful implementation?
19. What type of support and training do you offer? How much is included with the implementation cost, and how much will we need to pay extra for?
20. What is the cost of the first year of maintenance for your software? What about subsequent years?
21. How much does it cost to add new users? Describe the process for becoming an authorized user.
22. How can we ensure that users only access approved areas and functionality?
23. Does your system create an auditable trail of user activity?
24. What are your system’s security protocols?
25. What access protocols do you have in place?
26. How do you future-proof your customers? What will you do to ensure that we can grow with your system?
27. Describe the process for adding new entities or business units to your system.
28. If we want to integrate with an outside application, what are the protocols? Which integration paradigms and APIs do you support? Do you support GraphQL?
29. What differentiates your system from alternatives?
30. Where does your system fall short? What do competitors have that you don’t?
31. What three areas do you see as our greatest efficiency needs? How will your solution improve our operations in each of these?
Xledger Cloud ERP equips tens of thousands of customers in 60+ countries with the market’s most automated finance management solution. We treat every customer like our only customer, pairing market-leading functionality with radical service. Our personalized customer support has earned us an industry-best 97% customer retention rate. That’s lifetime, not year-over-year—we have retained 97% of all customers since our founding. Our recommending network includes KPMG, PwC, and BDO. For more information about Xledger and how we can serve you, please get in touch.