CTS Manufacturing Blog

By Sheldon Needle

Anyone who has been involved in either selecting or selling ERP software for manufacturing knows the process can drag on for months, if not years, and be agonizingly painful. This is not a casual circumstance but one built on some very specific issues which effect both the buyer and the seller.

When do manufacturing companies start looking for new job shop or production software?
The answer is “Only when they have to.” Such “have to” situations include an employee who is retiring that currently supports their custom legacy system; when the application software they own will no longer be supported by the vendor; or when their mediocre system costs thousands of dollars a year to maintain and is not being improved in any noticeable way.

Typically, manufacturers shopping for new software are looking for better job profitability, scheduling and available to promise, tracking work in process, life cycle management, demand planning and forecasting, and integrated inventory accounting.

Reasons for Delay (and Confusion):

Reason #1 – Past Experience
Firstly, there is the approach-avoidance issue in purchasing new ERP software for manufacturing. Nowadays, most managers have been through at least one, and , possibly several software acquisitions and implementations. They have experienced all the trauma bringing new company-wide ERP software to the organization in terms of stretching its resources and staff patience to the breaking point and beyond.

These past traumas are lurking in their minds even when they know new software is needed by their current organization, so they inevitably vacillate back and forth before proceeding with their new manufacturing software solution.

Reason #2 The Education Challenge
Successful managers think since they are really good at running a business, they are smart enough to figure out the best software to buy. But buying software requires a very different set of skills and, if the project leader lacks this experience, they will usually be very confused and frustrated when attempting to evaluate and select software.

The vendors then have to carry the weight of educating the buying prospect, which is a time consuming and tiresome exercise. So the educational aspect stretches out the buying cycle.

Reason #3 – The Trust Factor
The prospect may not trust the salesperson. No matter what he asks the salesperson, he gets a salestalk answer, “yes the software can do that,” or “that can be done with a custom report,” or “oh, that’s just a matter of setup.” These seemingly innocuous and comforting responses can lead to very nasty surprises.

Reason #4 – Nice Guy/Gal Syndrome
Another reason for the ardous software selection cycle is what I call the “nice guy, gal,” syndrome. Company people know that management is getting weak in the knees about going through with the project and, more likely than not, they will kill or delay it. But because the vendor has spent so much time with them and is so invested in their purchasing it, they don’t have the heart to tell them the truth and keep leading them on with one excuse after another about why they aren’t quite ready to sign a contract.

Correspondingly, the software salesperson deludes himself into thinking that the project is still alive despite unstated messages to the contrary from the prospect.

Reason #5 – Change in Terms and Promises
To stay in the competition and to keep the prospect in the sales pipeline, sales people may make promises or assertions that they cannot deliver on. Common techniques are to provide unrealistically low verbal price ranges for their software so as not to scare off the prospect (or to meet competitors’ estimates). They may also may make promises about what the vendor is prepared to do to get the contract in terms of custom software changes, writing custom reports, promises of new versions which have needed functionality and other verbal agreements. However, when the final contract quote comes in from the vendor, the script is rewritten and costs and deliverables may be very different from what was promised.
Needless to say, when this happens everything stops dead in its tracks.

Summary
Most software vendors and or/resellers that have been in business for many years are reputable and deal with their prospects in a fair and straightforward way. However, there are exceptions and buying prospects need to be alert to some of the traps they can run into. By the same token, prospective buyers also have an obligation to be truthful and direct in their communications and not lead vendors on when management backs off.

If both sides of the transaction can keep these things in mind, much could be done to alleviate the pain and confusion when acquiring a new MRP / ERP solution for their manufacturing company.