Independent ERP Advice: Why Your Business Might Need It

Updated: December 14, 2010

First, I need to make it clear that I have no fundamental issue with IT resale or referral arrangements. In fact, I believe that these arrangements play an important role in the IT economy provided that:

  1. The consultant is fully transparent about its relationship with the vendor, and
  2. The consultant is not providing system selection services.

I take issue with a consulting firm when it disregards either of the above principles. From a transparency perspective, I have a real problem with the discrete, hush-hush dealings that take place between so many vendors and consultants. From a selection services perspective, I believe that any selection project run by a consultant whose pockets are being lined by a vendor is nothing more than a sham. In my view, it is comparable to a lawsuit where one of the parties pays off the presiding judge.

Sommer would probably agree with my opinions, above. In his article, he also states that consultants paid by vendors should not be in the system selection business. He explains that "these referral fees are paid precisely because the vendor is steering business to another firm". As a result, the selection advisor becomes biased towards the paying alternatives and incapable of rendering an impartial recommendation.

I also believe that Sommer's views apply to the project management component of an ERP implementation project. A vendor or reseller's senior implementer is incapable of rendering an unbiased recommendation when the interests of the software company come into conflict with the interests of the implementing organization.

For example, every implementing company faces a decision as to whether it should either: 1) customize the ERP software to meet the company's business process needs, or 2) restructure the company's business processes to comply with standard ERP functionality. The senior implementers supplied by the ERP vendor or reseller are incentivized to recommend alternative #2. The incentives have to do with the fact that the implementing reseller of vendor is generally responsible for providing future maintenance and support. Customizations complicate their future maintenance service obligations. Now, I do not want to be understood as saying that alternative #2 should never be selected. Rather, what I am saying is that alternative #2 should only be selected when it is in the implementing organization's best interests.

Featured Research
  • 7 key questions to ask any ERP provider

    Having a fast-growing business is good. Having to overhaul your technology every time you need to scale is not. Upgrading to a more complete Enterprise Resource Planning (ERP) solution can help, but how do you ensure the solution you choose is exactly what you need? To help you with your search, we’ve pulled together 7 key questions every fast-growing business should ask before choosing a cloud-based ERP solution, including: more

  • How Finance Leadership Pays Off

    Oxford Economics recently surveyed 1,500 finance executives and it’s clear that small and midsize companies are growing significantly faster than larger companies. But, there are also big opportunities for finance to increase efficiency, boost financial performance, and work more strategically. Why is that? more

  • Professional Services Audience – Improve Profitability Infographic

    As a Professional Services Organization (PSO), you know the importance of customer satisfaction. In fact, 47% of PSO leaders say managing changing customer expectations is their top challenge. That’s why many firms are engaging smarter project management technology, even before deals are signed, to ensure project profitability. How are these leaders utilizing technology? Find out now. more

  • Top 9 ERP Myths Debunked

    ERP systems can help improve and streamline your business ways and can help with productivity, efficiency, reporting, and much much more. However, as ERP solutions have grown in popularity, myths have begun to circulate that are providing an inaccurate view of ERP solutions and just how they can benefit your business. more

  • Accelerating Profitable Growth as a PSO

    What’s the secret to profitable growth for organizations in the Professional Services space? New research from The Service Performance Insight’s (SPI) study, 2017 Professional Services Maturity™ Benchmark says that Professional Service Organizations (PSOs) that key business processes have much higher performance and profitability. In this brief, we explore the findings of the SPI survey and help you compare your own PSO’s performance by answering the following questions: more