The most commonly said phrase when it comes to purchasing or researching a product is "sorry, it's just too expensive". Sometimes we are thinking it and saying it before we even hear the price. It's a common thought pattern that the things that work, the things that are exactly what we need, are just too expensive to achieve. This is something that has come from many sources. Inflation hiking prices, the statement of "if you want something good, then you have to pay for it". They are all mind sets that we have been forced to adopt for various reasons. We always seem to judge the best product by the cost. Hopefully this will challenge your thinking around that. Hopefully it will begin an attitude of looking for the TCO. (Total Cost Of Ownership).
So where do we begin?
How do we shift from a lifestyle of thinking into a lifestyle of planning? I would love to say it's simple, but the reality is, it's not. It's a mindset that provokes much more thought than you would normally give when it comes to purchasing. This is a good thing though. We need to change our mindsets before we can truly see the full benefit of a product. Our previous thought process wasn't even a process, it was an assumption that took the least amount of effort and time when making a decision. An assumption based on the initial cost. Here is a three step plan to helping you make better choices, not only for you but for your business.
1. Do the Research
Some people get really good at researching products. They look for a standard set of things that can be ticked off. The product with the most ticks, is the one they look into. So let's take ERP systems for example. Does it take care of my finances? Does it allow me to track my staff and stay up to date with their progress? Can i see my customers and leads and check their status and where they are in the sales process? All of these questions are all valid. A basic ERP system should cover all these areas, but the real issue is, Are these the right questions?
When we come to researching a product there is one word that must be in the forefront of our minds. Scalability. Instead of "Does it take care of my finances" why not ask the question, "Can I see clearly on the system if my finances are going in the right direction, can I plan for the future, can I match revenue against future activity within my business?" Suddenly one question becomes three. When doing the research, don't look for the immediate benefits but look at how the system is going to benefit you in 3 years from now, when you are planning to expand and grow? Will this system still fit my needs in 3 years time?
2. Look for Support
Another misconception about products is that the source is always better. Straight from the horses mouth as it where. In certain instances this is true. In most cases, the source can be restricted and proves there to be a lack of movement in price, additional benefit and support. A third party company who provides the same product, has a sole focus in mind. "How do I make this product better?". The source will tell you it can't be, or that it's very expensive to customise. A third party will tell you how the system can be tailored for your business , where an out-of-the-box solution simply won't reach the areas of your business that an analyst would be able to illuminate. If the eco-system and support is weak, then the product may have a sell by date. If the eco-system and support is strong, then the product has the ability to grow and expand with you and your business.
3. Look for the products the company aren't selling.
This is really where the total cost of ownership comes in. When you buy a car, we have now been forced to look at the miles per gallon, but was this always the case? Not so long ago, reliability, speed, look, practicality, all came before miles per gallon. It has only been recently that we are starting to look at additional costs to owning a car. So why do we not carry that thought pattern over to business? What miles to the gallon am I going to get from this ERP system you are selling me? Many on premise systems don't give you a detailed enough breakdown of server costs and maintenance, IT Support and additional staff needed just to run the ERP, not to mention the cost of upgrades and back ups that surmount as well. The reason for this is because they are selling you the out of the box features that the manufacturer say are great. These features may be good, and these are the features we look for when doing our original research in point one. Now is the time to make the one question, three. How much will servers and maintenance actually cost me over a three year projection? Is there additional support and customisation available? What will happen when my server crashes? These are all scenarios that will bleed your finances dry. Making your solution, redundant.
When choosing a product, or in this case an ERP system, don't simply look for the cost or even the features. Look for the cost of the product to your company over 3 years. Where one product may be more expensive up front, how much will the cheaper product end up costing in the long run. This is where the usual misconception of NetSuite applies. Yes there are cheaper off-the-shelf products, but are they really cheaper? Here, you can download our TCO study that really breaks down the overall cost of alternatives and shows you very clearly that this 3 step plan is worth doing to adjust your mindset. It's time to make smarter purchases and receive a better return of investment than what we are currently getting.