A recent blog by Dennis Howlett on ZDnet mentions that Microsoft is adding a small user finance/ERP package, Dynamics Entrepreneur Edition. This package was one of the apps that were acquired when Navision Damgaard was bought; it is not a new app but never got exposure outside of some northern European countries.
This new licence is described as allowing “the opportunity to trade up customers as they grow because a switch to the full blown product will likely involve little more than a flip on the registration key switch.” My question about this approach is – since people who buy entry-level models of cars (eg, Toyota Tazz) do not necessarily upgrade with the same company (eg, to a Corolla), why should we expect companies to do the same with their ERP software?
When people upgrade their car there are other requirements and attitudes beyond the fact they might get a good deal from their current vehicle supplier. For example, a Toyota Tazz owner who wins the Lotto would be more likely to buy a BMW or Mercedes than a Lexus because their are other issues involved.
When companies come to upgrade their ERP, they look at other things than just the licence cost, which anyone who sells and implements ERP can attest. We have opportunities involving companies using entry-level products who are not considering upgrading from, say, Pastel to AccPac or Sage, which are like different car models from the same company.
The software licence price really isn’t an issue, because:
- a competing vendor can and will adjust their licence pricing to be competitive with an incumbent, if the deal warrants it;
- the implementation costs can far exceed the licensing costs, even if its upgrading to a different package in the same line;
- each package has its own way of dealing with functionality, so project activities like requirements analysis or training have to done as if this is a brand new implementation;
- an incumbent must treat it as a standard sales process because all the normal sales issues have to be addressed, even though its an existing customer;
- quite often companies feel their incumbent ERP has let them down are are looking for something that will work better for them.
Until a customer can upgrade from a lower-level ERP product to a higher-level one in the same way people can upgrade from Windows XP to Vista, having different levels of ERP packages will not be a safe guarantee that customers will stay with the same vendor as their ERP needs grow.