Your ERP Install Partner Almost As Important as the Functionality

ERP, Enterprise Resource Planning, Microsoft, Oracle, Sage, SAP, order management system, OMS, operations and fulfillment, value added reseller, VARThe major software companies, especially enterprise-wide providers like Microsoft, Oracle (JD Edwards EnterpriseOne), Sage and SAP, have made huge headway into the order management system marketplace for moderate to large ecommerce and catalog companies.

It’s important to remember that the ERPs have a development legacy outside this marketplace. In most cases they rely on business partners or VARs to develop industry-specific functionality for order management, distribution, marketing, merchandising, etc.

To sell to widely different market niches, today’s ERP players have flexible configuration setup and often layers to provide standardized functionality and unique requirements at the same time. For example, Microsoft AX has eight software layers and uses five of them for partner and client customization.

Customization can be easily inherited during upgrades and the deployment of add-ons within multiple sites. This architecture allows you to customize the system without affecting other layers. Additionally, large VARs or solution partners may actually sell and install more than one software manufacturer, like Microsoft and Sage.

There are a couple key points here. The selling agent is the partner or VAR representing the software manufacturer as well as themselves as installers and your first line of system support. Initially you may say, “These are big software companies with lots of experience, what’s the problem?” The reality is you are contracting with both the manufacturer for the base software and the partner or VAR for the implementation, services and ongoing support.

That means you have to evaluate not only the ERP/order management system but also the VAR layers specific to your industry and the VAR’s capabilities and experience. Most of them specialize in one or more industries such as wholesale, retail, government, manufacturing and direct commerce, and develop industry-specific functionality. All of this adds complexity to the selection process, but it’s key to having a successful implementation and long-term adaptation for your company.

So selecting the right partner or VAR is as important as the software selection itself. There is a wide range of experience among them in terms of customer size, number of employees and the complexity of DTC businesses installed.

Another disconcerting fact is that the initial partner often gets fired by the customer; one major software vendor told us this happens in about a third of the cases. In others, the company decides to hire a consulting firm or freelance developers, or takes the remainder of the implementation in house. Ultimately, this prolongs the installation process and increases costs, and the first partner has collected much of the initial budget.

Through our consulting with large direct-to-customer companies installing ERPs, here are some key questions you need to answer about the partner you will ultimately select:

  • Which partner has the best application fit for your company? This can only be determined by drafting requirements, writing RFPs, directing scripted demos and talking to qualified references.
  • Is the partner’s main marketing focus installing the OMS in companies of your sales volume? There are many partners to choose from and some specialize in very large retail/ecommerce entities, and their costs and experiences are geared accordingly. They may not be open to selling and installing systems in smaller businesses.
  • How many referenceable installs do they have that are similar to your operation (e.g. ecommerce or B2C)?  We have had situations where a partner’s experience and installs were not in the ecommerce and catalog area. Yes, they may have had warehouses and ship small packages, but upon closer inspection their industry experience in multichannel was lacking.

We believe there is a tremendous future for ERP/OMS in ecommerce and DTC businesses. Do your due diligence and pick not only the best ERP but the best VAR for your business.

Curt Barry is president of F. Curtis Barry & Company

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