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ERP Integrators - Yesterday's T-Rex, Today's Fossil?

Posted on July 18, 2013 by Kent Smith

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Industry trends come and go; products get hot and then disappear. ERP systems, once implemented and running production often need little maintenance or adjustments, especially off the shelf versions with little customizations. These SW Megaliths have to continue to generate revenue and do so by developing ERP systems with a limited Support Model and force customers to upgrade to the next version or risk losing support. An ingenious business model. Frustrated companies are forced to upgrade leading to countless meetings, planning and stress regarding how to accomplish this, who will integrate and how to tackle resource allocation.

The constant through eons of ERP upgrades and implementations is the “Integrator.” The Company backed vendor who will come in and magically install/upgrade your ERP Software. The “Integrator” is so trusted, their company sanctioned work is “suggested” by the ERP SW Company. Another constant is the exorbitant hourly rate that accompanies the privilege of hiring them.

What does this exorbitant rate produce for clients? Do the integrators have access to an exclusive pool of talent that ordinary companies don’t? Do the Integrators provide any additional value for the client? Do they ride a magic carpet that eliminates any problem magically?

Let’s answer these questions by examining a case study conducted in Dallas, TX during an Oracle ERP upgrade from 2012 to 2013. In order to protect identities we will not identify the parties involved.

Responding to a RFQ in early 2012 and then through the RFP process, as a non-integrator company competing with several Oracle VAR Integrators, Talent 101 was ignored by the Integrators. When it came time to put together the technical team, it appeared that the integrators possessed an advantage by having a team that had conducted numerous upgrades as a cohesive team. In reality, the were trying to recruit the very people that we had put together as a team. More surprising was that they had promised to put onsite an experienced team that had worked together on many upgrades. After learning this, our confidence soared.

The next area we thought the Integrators owned an advantage was Project timeline. We as an ordinary Workforce solution company had never actually worked through an upgrade from beginning to end. We expected the Integrators to be onsite and starting project work within a week. After consulting with our technical team (the same talent the Integrators were after), we were certain we could be begin the project within 3 weeks, only to learn the Integrators were trying to schedule the kick off 3 - 5 months later (depending on the company). As David, we felt we were beating Goliath, our confidence was soaring.

Several weeks passed after Best and Final Offer (BAFO) so our confidence was waning, we thought we fought the good fight. We thought our incredible value proposition was overcome by client reluctance to trust an unknown commodity.

In the end, we got the call. Price won out over experience.

The end result was our technical team started on time and in a cohesive manner, delivered the upgrade on time and at a substantial savings over the approved and experienced Integrators. Through the RFP process, the lowest ERP bid was just under two million dollars with the client having to push the kick off back a quarter. We delivered the completed upgrade with the same resources the Integrators would have used for well under $900,000. We accomplished this, all this while paying the technical team similar wages as the Integrators offered. So where is the integrator value?

That is over one million dollars less and a substantial savings for our client. So that brings us back to the question, “what does the exorbitant rate the Integrators charge do for the client?” If the Intergrators use the same talent we do, cant offer magic solutions, delay the client timeline AND charge exhorbitant rates, then T-Rex is rapidly becoming a Fossil.

If you are currently considering an ERP upgrade, and are interested in options other than the Integrators, ask us how we saved our client so much money!

Photo courtesy of Diane Turner mcdlttx on Flickr

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Kent Smith

Kent Smith is a Senior Business Development Manager at Talent 101. He is responsible for managing the semiconductor engineering solutions at Talent 101’s clients. His expertise includes recruiting and workforce solutions, and working with engineering groups at Talent 101’s clients to improve business performance.

kents@talent-101.com