The major software companies, especially enterprise wide systems from Microsoft, Oracle (JD Edwards
EnterpriseOne), Sage and SAP, have made huge head ways into the order management system marketplace for moderate to large e-commerce and catalog companies. It’s important to remember that the ERPs have a development legacy outside this marketplace. In most cases these software companies reply on Business Partners or Value Added Resellers (VARs) to develop industry specific functionality which gears the base ERP to your order management, distribution, marketing, merchandising, etc. requirements.
To sell to widely different market niches, today’s ERP systems have flexible configuration set up and often “layers” to provide standardization of functionality and unique requirements at the same time.
For example Microsoft AX has eight software layers in total and uses 5 layers for customization by partners and customers. Key to flexibility and tailoring to your company is that you can manage the codes and objects in the system by layer. Simplistically:
• 2 Layers customized by customers/Partners – your company specific
• 3 layers customized by Partners – industry specific functions
• 3 layers defined by Microsoft – base ERP layers
Customizations can be easily inherited during upgrades and the deployment of add-ons within multiple sites. This architecture allows you to customize the system without affecting other layers.
Additionally, large VARs or Business Solution Partners may actually sell and install more than one software manufacturer like Microsoft and Sage.
There are a couple key points here. The selling agent is the Business Partner or VAR representing the software manufacturer as well as their company as installers and your first line of support for the system. Initially you may say, “These are big software companies with lots of experience, what’s the problem?” The reality is that you are contracting with both the software manufacturer like Microsoft for the base software and the Business Partner or VAR for the implementation, services and on-going support. So you have to evaluate not only the ERP/ order management system; the VAR layers specific to your industry niche; and the capabilities and experience of the VAR. Most VARs specialize in one or more industry niches such as wholesale, retail, government, manufacturing, direct commerce (part of retail), etc. The VARs develop industry specialized functionality which makes the ERP system more effective to that industry niche. All of this adds complexity to the selection process but it’s key to having a successful implementation and long term adaptation for your company.
Selecting the right Business Solution Partner or VAR is as important as the selection of the software itself. As we help companies decide on the software they want to install we have found it to be equally complex to evaluate and decide on the Business Partner. There is a wide range of experience among these Business Partners in terms of the customer size and complexity of direct to customer businesses installed. Some companies only have dozens of employees selling, developing industry functionality and supporting customers. Others have thousands.
Obviously, success is largely determined by the number of new sales made and the installed base the Business Partners retain. Don’t think you’re going to find some "Good Housekeeping Seal of Approval" in the terms software companies and Business Partners use to compare their success one to another. Websites are plastered with labels like Partner of the Year; Gold and Platinum Partnerships, President’s Club, etc.
Another disconcerting fact is that the initial Business Partner selected often gets fired by the customer. One of the major software vendors told us the percentage of initial business partners that get fired can be as high as 30%. This reopens the Business Partner question or often the company decides to hire independent consulting firms,free lancers or decides to take the remainder of the implementation in-house. Ultimately, this elongates the installation time frames considerably and also increases the cost. The initial Business Partner has collected much of the initial budgeted monies.
Through our consulting with large direct to customer companies, here are some key questions you need to answer about the Business Partner you will ultimately select:
1. Which Partner has the best application fit for your company? This can only be determined by drafting requirements, writing RFPs, directing scripted demos and talking to qualified references. Recently, we saw a Business Partner’s abbreviated demo of their order management system. While it did have order entry, phone sales and customer service - guess what - their industry niche is wholesale. They do not have any credit card authorization and settlement functions for B2C. Additionally, the Return processing functions could not credit back to the credit card as it was an open account system.
2. Is the Partner’s main marketing focus to install the order management system in companies of your sales volume? There are many Business Partners to choose from and some specialize in very large retail and e-commerce entities. As a result their costs and experiences are only geared to those companies. They may not be open to trying to sell and install their system in smaller businesses.
3. How many referenceable installs do they have that are similar in operation to yours (e.g. e-commerce or B2C)? Let me explain why this is an important question. The Partners can generally sell to anyone that will listen. But many times the software company assigns them to verticals which they feel they have the most experience in. We have had situations were a Partner’s experience and installs is not the e-commerce and catalog vertical. We have seen one Partner whose strengths are in wholesale and distribution, feel they are qualified to install in a B2C e-commerce and catalog company. Yes, their vertical has warehouses and ships small packages, but when you look at their industry experience in B2C it’s lacking. Also, don’t forget to ask whether the installs are in this country.
SHARE