The Pros and Cons of Hiring an ERP Consultant

Updated: April 30, 2009

A growing number of businesses are facing the choice of whether to hire an ERP (enterprise resource planning) consultant. If you're planning a new ERP deployment or upgrading an existing system, there are many reasons for and against bringing in outside help. Here's a quick look at the points you should consider before making a final decision.

Pros

Expertise: Since their job is to design and refine ERP deployments, consultants generally have greater knowledge and insight than in-house employees — even those who have studied the technology and its various vendors . An expert consultant can quickly assess business needs and deploy a tailored ERP environment with minimal disruption to existing operations.

Better ROI (Return on Investment): An ERP consultant can keep you from wasting time and heading down blind alleys, such as investing in modules and features you don't need or that can be handled better by non-ERP technologies. Since a consultant performs most design and deployment work independently, IT staffers can continue their everyday tasks without being unduly distracted by ERP issues.

Enhanced Training: Most businesses deploying or improving an ERP solution focus on functionality and performance issues, but user training should be another key concern. A good ERP consultant will either bundle the cost of training into the overall deal or offer the service at a reasonable price. While it's always possible to go to a third party for training, the project consultant is already in-tune with both the ERP software and your organization's needs.

Extended Support: Many consultants provide repair, response and handholding services that extend beyond the basic vendor tech support. You'll pay a price for these services, but if you rely on your ERP 24/7, the cost will be minimal compared with what you stand to lose if your system shuts down for an extended period of time.

Cons

High Cost: As you may have already noticed, ERP consultants aren't cheap. If a project is simple and straightforward — such as performing a no-frills upgrade — a business may save money by using in-house IT staff. Additionally, most vendors offer some form of free or low-cost support for businesses that decide to handle their own work, so check with the software's supplier before signing with a consultant.

Getting Stuck with a Loser: Finding the right consultant is almost as much work as pinpointing the best ERP technology. While careful research and reference checks improve the chances of connecting with a qualified consultant, it's still possible to get locked into an unsatisfactory deal with an arrogant, ignorant or lazy partner. Unfortunately, once the contract has been signed, it may be very costly to terminate the deal.

Biased Decisions: Many ERP consultants are either aligned with a specific vendor or prefer a particular company's products. In either case, the consultant will attempt to steer you into a product line that may or may not best match your needs. Find out as soon as possible which vendor a prospective consultant favors and then decide whether you can live with that choice. More importantly, don't expect the consultant to serve as a buffer between you and the vendor. If push comes to shove, you'll need a lawyer to play that role.

Poor Communicators: Even if a consultant is skilled, honest and motivated, he or she may have communication deficiencies that can lead to misunderstandings and missed goals. A consultant who can't effectively communicate is of little use to a client who is relying on the individual to understand its business and operational needs. With poor communicators, the client usually ends up with a system that the consultant thinks is best rather than what the company really wants and needs.

The Bottom Line

Any sizeable ERP project requires a consultant's input at some stage of the process. Careful research will minimize your business's exposure to the industry's potential drawbacks.

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