In 25 years as a Microsoft Dynamics ERP and CRM implementation partner, we often find ourselves suggesting that clients follow the adage, “Be careful what you ask for.” Especially when it comes to fixed fee implementations. It’s understandable that companies want to control costs and avert what’s commonly referred to as “scope creep.” But at the TM Group, we have found that fixed price implementations are extremely detrimental to clients. Typically, the ERP vendor inflates the price of the implementation to support any number of issues arising that could cause them to miss their services revenue goal. In addition, a fixed price guarantees the vendor a certain amount of money, even if the effort they expend is less than the price, and this causes the client to spend more than they should.
MEASURE TWICE – CUT ONCE
A much better approach to minimize risk and properly budget for an implementation, is to perform proper due diligence up front. At the TM Group, our estimates are within 5-10% of actual usagewhen our consultants have the opportunity to work closely with the client to carefully scope the project from the very beginning. We have not undertaken a fixed price implementation in at least 10 years, especially where CRM or ERP are concerned.
Instead, we recommend an initial discovery phase orBusiness Process Review at a fixed cost, to accurately document the desired solution for a new ERP or CRM system. In our experience, this initial phase is of paramount importance to the success of a project. Through the process of carefully developing a scope document up front (a Statement of Work); we also reduce total implementation hours required. The investment for the client is money well spent and consists of two or more senior consultants on-site for several days to a week interviewing management and subject matter experts from each of the client’s department. The information gathered is documented and analyzed for gaps. Based on these findings, we are able to accurately estimate the effort required, and provide a detailed Statement of Work for the ERP and/or CRM project. If desired, a Not to Exceed Quote can also be provided which limits the clients exposure to project overruns and yet ensures they only pay for the services they utilize, a much better deal for the client than a Fixed Fee Quote.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.