Despite Oracle's best intentions, why should customers have to sift through 40 pages of data to figure out which license to pick? Shouldn't software vendors simplify pricing instead? Likewise, don't just give customers access to legions of implementation specialists (whose fees can run 10 times the price of the software). Give them software that's easier to set up and run. Don't just give them streamlined patch-management programs and upgrade schedules. Give them software that's not dysfunctional in the first place.
The operations chief at one enterprise that recently implemented financial, human resources and other ERP applications says she was shocked when the vendor refused to sign an agreement vouching that the applications would work as promised. When push came to shove on this seemingly standard requirement, the vendor was ready to walk away. (Unfortunately, by then it was too late for the customer to go elsewhere.)
Yes, an ERP or SCM application, since it's weaved into so many critical business processes, is an inherently more complex capital purchase than a lathe or a KVM switch. But what drives customers crazy more than the quality problems is the lack of vendor transparency. These enterprise-software engagements are more like marathon labor negotiations than trusted business partnerships. At least Oracle is trying to come clean on its complex pricing, but what about its (and other vendors') behind-the-scenes relationships with consultants? What about the endless upgrade mill vendors have customers running on?
Business Unusual
Several years ago, when funds flowed freely, IT pros could throw money at software projects gone awry -- hire more consultants, cobble together workarounds, latch on to the latest vendor fix. But with funds scarce and management demanding quick returns, it's no longer business as usual.
So what do customers want? When InternetWeek.com recently asked 102 IT professionals what software vendors could do to attract their business, 34 percent cited "shared risk/shared gain" payment structures, 26 percent cited lower costs, 22 percent cited fixed-price contracts and 9 percent cited "rent-to-own" licensing terms.
To some degree, vendors are responding. Most now offer packages with a fixed price, feature scope and deployment time, and some are bundling test scripts to ensure that the software works. Siebel this month released 20 industry-specific upgrades to its CRM application that incorporate business process "best practices" so customers, ideally, won't have to do so much customization. Supply chain execution specialist RedPrairie offers a fee structure based on the financial benefits customers realize from its software.
It's now up to customers to do their homework and reward those vendors that are meeting them at least halfway. Or learn how to walk away themselves.
--Rob Preston, rpreston@cmp.com
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