Epicor says "shared benefits" program will reduce both the risk and cost of implementing ERP
Mid-market ERP software supplier Epicor has launched a program that calls for it to share the risk of potential cost overruns associated with implementing its system.
Under the program, known as Shared Benefits, if an implementation goes over budget Epicor will bill the customer half of its normal hourly consulting rate for all work that exceeded the original estimated budget.
Customers signing up for this program also must agree to split any cost savings with Epicor if a project comes in under budget.
Epicor announced this program at Perspectives 2009, its annual user conference, which took place Nov. 9 -11 in Las Vegas.
"The ERP industry as a whole is notorious for endless implementation cycles and excessive deployment costs," said George Klaus, Epicor chairman, president, and CEO. "We’re offering our customers a compelling way to mitigate deployment risks and improve ROI with our Shared Benefits program, where customers and Epicor share equally in project outcomes."
Epicor officials say they are confident most implementations under the program will result in shared savings-as opposed to shared costs-because all projects will be supported by Epicor’s Signature Methodology for implementing systems and its Project Control Center, which provides timely and accurate information about project health and activities via a portal accessible to all stakeholders.
The Shared Benefits program calls for Epicor and its customers take joint responsibility for the project scope definition based on detailed project mapping, mutually agreed upon business outcomes and ROI calculations.
Both parties have financial incentives to tightly manage the project in adherence with the agreed upon scope to minimize project delays and risk factors.
Analyst Ray Wang of Altimeter Group who has advocated strongly for fairness and transparency in software licensing and pricing writes of the necessity for trust in a vendor-customer relationship "The most valuable commodity in this economy and in business relationships is trust. The current downturn in the economy has been exacerbated by deterioration in trust and a lack of any one party to improve trust and accountability. Software vendors have this opportunity to take their position of strength and demonstrate how they can provide customers value during a down turn. In doing so, they will help their customers succeed and earn customer loyalty and good will when the economy picks up."
Among the first companies to take advantage of Epicor’s Shared Benefits program is Baker Perkins, a global manufacturer of equipment for making food products such as baked goods and breakfast cereals.
"What appealed to us about the Shared Benefits program was its overall disciplined project management methodology and focus on collaboration and accountability," said Bob Collin, project manager for Baker Perkins. "This gave us confidence that the right controls and best practices were in place to ensure a smooth deployment in the most cost effective and timely manner."