I received an e-mail from a good friend and colleague who was having trouble helping a client make a critical technology decision. I received it because we shared the client, and she did not know what to do. I am changing the names “to protect the innocent” and think a lot can be gleaned from this person’s experience. We are going to refer my colleague as Anna and our shared client as Mike.
Anna’s technology consulting firm is supposed to help Mike choose a new software system for his company. Mike decided to hire Anna because it was obvious from the start that he did not have the knowledge or experience to make the decision himself, and no one in his company did either.
As a little more background to the story, Mike actually had done a little research and was already fond of one software system he had seen. Not because he had done exhaustive research. It was just that he felt this system was much better than what he had, and it was on a “cloud.” The salesperson had done a really good job of selling him, and Mike was really convinced that moving all of his computing to “the cloud” was the best decision for him.
I’m using the software brand names because I’m not offering an opinion about their value. They just happened to be the brands presented to Mike for consideration.
As we all know, each circumstance is unique and requires a good expert to help us make the right decision. I am sharing this scenario with you because I see this decision cycle play out time and again. The consequences can be dire because invariably people make decisions for the wrong reasons, and the decisions are often bad!
The following is the e-mail I received.
We had a demo of SAP on Friday afternoon. Unfortunately it got started a bit late due to Internet problems in their office. It caused a bit of a time issue as they had their holiday party later in the afternoon.
Mike stayed at the beginning of the demo, but towards the middle, he walked in and out (even changed his clothes). He seemed to like the solution until he heard the pricing, which surprised me. It costs more than NetSuite, but it’s still very much a reasonable alternative. Once I got to the bottom of it, it turns out that he believes that NetSuite is going to give him a free year! I’m not sure what planet that would happen on, but it’s not this one.
As I told him before concerning costs, this is the best time of year to shop for an ERP system. All solution providers are giving nice discounts, but they still need to make deals that work for themselves. I’m a firm believer in everyone shaking hands on a deal that is fair to all. I’m hopeful that he feels the same, otherwise none of these solutions will work.
Once he heard the pricing (see below) he decided that SAP was only a step up from QuickBooks. I’m not sure how he came to that conclusion. I’ve come to believe that his MO is that when one thing is wrong, it’s all wrong!
He was also upset that none of the pricing included an eCommerce integration (which was very deliberate on my part). I had spoken with his colleagues and indicated that, because their operations are so manual, we would do a phased implementation. I am very concerned that if we implement everything at once, we are setting ourselves up for failure. I only wanted to be certain that whichever solution we decided to implement, we would have the capability to add eCommerce. I am currently getting eCommerce pricing for them, but I highly recommend that we delay eCommerce until phase II.
In terms of pricing, over 5 years, the numbers are (not including eCommerce):
SMB Suite (Great Plains) 240K
FYI; I sent Mike an e-mail yesterday giving him a link to a demo for SAP that he could watch at his leisure. That way, if he loses interest he can start and stop it. I also offered to have a second demo on Friday morning addressing his concerns and/or open issues. I have yet to hear from him.
I will keep you in the loop. Any suggestions would be welcome.
Just reading the e-mail, there are several decision traps.
- How engaged does Mike appear to be in learning about his options?
- It appears that they have not agreed on the process they will use to make a decision.
- It seems they have not agreed on all the criteria for making a decision. Going through this process helps establish Anna as the expert and lets Mike know what he should look for as he goes through demos. They also need to agree to rating systems for each item. Without these steps, doing demos is a waste of time.
- Have they ranked the different criteria? Everything cannot be equal!
- Did they agree up front on Mike’s budget expectation? It appears that Mike wants everything for free.
- Is Mike the expert, or is Anna? It appears to me that Mike sees himself as the expert.
- Was Mike going through the entire process with an open mind or was he looking for validation for choosing the product he looked at on his own? This is a major expenditure for Mike and is critical to his operations. By his behavior during the demo, it appears his mind was made up before the demo started. I would call him on it.
Mike is not committed to the process that Anna has established and obviously had some preconceptions in his head. He will probably not click on the link to the demo she sent. Even if he does, will not look at what she would want him to look at, would not know how to rate and compare things to NetSuite, will not rank things the same way she would, and I can predict the outcome. Without an open mind and proper engagement he will end up choosing his original choice, NetSuite, which may or may not be the best choice for his company.
Howard Shore is a business growth expert that works with companies and people that want to maximize their growth potential by improving strategy, enhancing their knowledge, and improving motivation. To learn more about him or his firm please contact Howard Shore at (305) 722-7213 or [email protected].