Epicor Commits to Cutting Implementation Costs

Last week, Epicor launched a program to curtail ERP implementation costs, in an effort to provide customers some value during the economic downturn. The program is based on shared benefits, with the press release detailing it as such: “Upon project completion, if the project is under budget, the savings are shared 50/50. Conversely, if the project runs over budget, the customer is billed 50% of the contracted professional services hourly rates for all over-budget costs.” As ERP projects have a tendency to run late and over budget, this is a welcome initiative, even if some are questioning its real-life execution.

Under the new plan, Epicor and its customers will work together to determine the project’s scope, goals, and expected ROI, and the notion is that it will provide the comfort of a fixed-price agreement and still offer the potential for more money. Epicor’s VP Consulting, Craig Stephens, also notes that Epicor will take some of the burden in overrun costs, which is surely a move on the company’s part to keep customers who will later upgrade their products, as Stephens has stressed the importance of upgrades before, and since this is much more economical than solely courting new customers every time there is a new version release. Even better, this new program could also resonate with companies who implemented ERP solutions at the turn of the century and are now shopping around for new platforms.

Members of the IT elite have voiced a few concerns about the program, and Frank Scavo, managing partner of IT consultancy Strativa, points out that that problems could arise regarding the spending of professional service dollars, with companies spending as little as possible to come under budget. Another issue, Scavo suggests, is the choice of project consultants—since Epicor is responsible for 50% of consultant fees after the budget is spent, this could affect their selection of consultant’s assigned to the product. Lastly, Scavo notes that Epicor 9 was released about a year ago, and as it is their premier product right now, their best consultants may be attached to it.
Of course, the cost-implementation program is in its infancy right now, and the suggested issues are merely conjecture, so it will be interesting to hear customer reviews in the future.

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