Buying Icebergs: Dangers Of Discounted ERP Software
Posted by Ben Kaplan on December 18, 2014
In good times or bad, we all hunt for a deal. Whether it’s found online or in a brick-and-mortar store, nothing is more enticing than a product that has a substantially reduced price.
ERP Buyers Beware: Software bargains are more like icebergs
On the surface the situation appears to be ideal, but what lurks beneath can be very damaging to a business.
Beware of software publishers offering big deals
We have heard stories from clients and software industry colleagues about software publishers who are willing to knock 60%, 70% or even 90% off the price of ERP software, anything to get a contract. We wanted to provide software shoppers with a few important questions to consider the next time a publisher or dealer tries to offer a steeply discounted product. At Crestwood we are true believers in the notion that nothing in this world is free.
ERP Software: Why didn’t you offer me the discounted price when we started our negotiation?
If someone is willing to discount their product substantially, what’s the catch? The catch can usually be found in the fine print of the contract. Discounts will only last for so long and the highly inflated price will kick in. Or, maybe the software is discounted but the service and maintenance costs are inflated.
ERP Software: You Get What You Pay For
If the publisher is willing to slash the cost of their software, their product must not have cost very much to develop. Do you really want a cheaply constructed software system to be the backbone of your business? If you’re buying the software through a third party, can you trust the company will provide you with the best solution available instead of the cheap stuff they tried to get you to buy?
At the core, buying business software is not different than buying anything else. If the price reductions seem too good to be true, they probably are. You’re either locking yourself into an expensive long term deal with short term benefits, or you’re buying a marked up poor quality product.
During this season of shopping and freebie frenzies, don’t get caught up in the excitement of a deal. It’s important to look beneath the water and get a sense of what you’re dealing with.