6 Ways Users Can Control Their ERP Integrator | ERP Software Licensing Attorneys

If the integrators of ERP software systems were as smooth at integrating new or upgraded projects as they are at selling, it is likely they would be involved in fewer disputes with users that end up in court. Often, it happens because senior management at a user hands off responsibility for the effort to the integrator rather than owning it as an integral part of management’s job running the business.

The reality is that people in charge of an organization cannot delegate authority for an ERP project to either the vendor or an integrator. Their interests are usually different than yours. Ensuring this does not happen must start when the project is in its inception phase before any vendors even are invited in for a demo or asked to submit proposals.

It carries through negotiating the contract, while the software is being customized and when the integrator begins to mesh ERP with all the other systems in the business.

Avoiding Integrator’s Tricks

Just as the development and launch of a new product line is owned by the executive suite, so too must be the ERP software system from its earliest days. Deciding to proceed with or restart a digital transformation whether during or after Covid-19 is a huge effort. Top executives – even the board, in some instances – must set the pace, tone and the boundaries of the project.

This includes riding herd on the integrator.

Indeed, a survey of ERP users done by Third Stage Consulting found that managing deficiencies with the system integrator is one of the most common problems that organizations have as they strive to make the system operational and bring it online.

During the sales cycle, integrators will assure a user they will be partners on the project and some of them are. Yes, the integrator’s job is to make the system work properly. But an undisclosed part of their job – and compensation – is to upsell additional services to the user during the project. So, it is incumbent on the user to control them closely.

The starting place for controlling an integrator is to include in the contract with Accenture, Oracle, SAP or any other outfit precisely what they are obligated to do. There needs to be a number of detailed provisions:

  • Spelling out who has the authority inside the user’s company to approve change orders.
  • Name the third-party contractors that will be used by the integrator, and include in the contract their experience with both the ERP software system being integrated and the user’s specific type of business, and how they will be managed.
  • If practical, include the names of specific people who will work on the project both at the integrator and third parties along with how the user will be notified if there are personnel changes at any of the service providers.
  • Require monthly or quarterly reports on both the progress that has been made. and exceptions to either the contractual timeline or what was stated in the integrator’s RFP response.
  • A designated, senior-level contact at the integrator with whom the user can discuss everything from about progress to resolving problems; this should be an executive, not a project manager or account person who may be motivated to protect their position with their employer.
  • Also try to include an ”out” provision that lets you fire the integrator if they are not meeting certain, defined obligations or causing issues with the project.

Also ensure that when an integrator recommends buying additional software licenses, ask them to specify in writing why, how it will enhance the project, and when it will be used. Vendors and integrators of ERP software systems are notorious for recommending license add-ons that may not be needed for years, if ever. But they receive fees for all of that time.

Integrator’s Secret Sauce

During our career working on legal issues surrounding ERP software systems, we have learned that in too many integrators do not really want you to know – or understand – how they make their money. The best way to protect yourself and your organization is to be aware of how they work, and to have a tightly written contract.

While it should be only a last resort, if discussions with an integrator fail to resolve a major conflict, do not be afraid to fire them. Doing so never is easy but it is easier than suffering a failed software implementation.

If you have questions or concerns about an integrator or the contract they want you to sign, feel free to call or email us. We will be pleased to share what we know and help you through the process.