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Thought Leadership

EPM Implementations: The Cost of Buying on Price Alone

Posted by Rick Bryant on Thu, Nov 15, 2012 @ 09:11 AM

cost"The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory."-Aldo Gucci

Every one of us can look back on our purchase histories and find cases where we went with the lowest cost for a good or service and immediately, or soon thereafter, regretted that decision. What is it about saving a relatively small amount of money that blinds us to the risks associated with going with the low-cost choice? I'd like to think I've learned my lesson, but I am still drawn to those utility pole flyers that advertise brand-new, still in the box, six-person hot tubs that retail for $6,000 but are being offered for $3,000. What's the risk of buying from a guy advertising on utility poles? Risk? What risk? Where do we start? Warranty? Not likely. Customer service desk? Hardly. Training? You'll be lucky if you get a manual. References? I could go on and on, and it could be kitchen cabinets or leather sofas, but you get the idea: If it sounds too good to be true, it probably is.

With the recent recession and oh-so-slow recovery, the pressure to do more with less has never been greater. Survey after survey has shown little uptick in hiring or budgets, especially in finance departments. In my 14-plus years in the ERP/EPM software space, I've seen many instances in which a customer went with the low-cost service provider, only to regret that decision down the road. In many of those cases, the customer ends up paying more to rectify the sub-standard implementation than they would have if they had gone with the most capable service provider in the first place. In the meantime they have frustrated the user community, IT, and likely the executives who supported the project. Hopefully it is not too late and the implementation can be turned around.

Obviously, there are varying degrees of capabilities amongst service providers. (You can read about the differentiators in detail here: Choosing the ideal EPM implementation provider  When it comes to your SAP EPM BPC software, for example, my advice to you is to do a thorough comparison of potential service providers. Don’t compare them on price alone; you need to really understand what you are getting for your money.

 "It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money--that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot--it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better."--John Ruskin, The Common Law of Business Balance

Let me close out this post with a request. If you are a SAP BPC customer, we want to hear from you. We have created a BPC Customer Satisfaction survey that will help us provide quantitative data about performance, cost of ownership, process, ROI, and many other attributes of deployment profiles of individual companies using SAP BPC. To take part in our research project, please email us at info@column5.com to request a copy of the survey. The survey is completely free, and open to all BPC users. There is absolutely no obligation to use Column5 as your service provider in order to receive the free, valuable benchmarking on achieving value from your EPM solution.


Topics: Enterprise Performance Management (EPM), Training, Performance, Value, Implementation


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