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How to Break Free from Traditional ERP Maintenance Costs

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They say money makes the world go round. Maybe I’m an optimist, but I happen to think that good people and strong values make the world go round. Unfortunately, in the business world money does seem to be the answer to almost every question. Why are we signing a deal with them? An increase in profits. Why are we not selling that product anymore? The holding costs were too steep. This goes on and on. A good business finds the balance between focusing both on customers and profits. Some do better than others; large enterprise resource planning (ERP) companies make no secret about where their loyalties lie. Their long list of implementation fees, maintenance contracts, and licensing fees make it crystal clear (or at least it should).

Reliance

The ultimate goal with large maintenance contracts is to extend the business’ reliance on the ERP company, as well as spread out ongoing costs associated with supporting the contract. Not only can they be the only ones to give you access to the system, but they are likely also your sole source for help. This means your relationship with the company is a closed channel allowing the ERP company to maximize revenue. Besides, who can fix your ERP better than the people who made it?

That is, if they pick up your call. Often, legacy ERP companies take months to respond to customer issues. And that’s only if they see a solution for your problem. Despite the low-grade support, maintenance contracts can run up to 15-20% of the initial cost of the ERP. This is something you’re definitely going to have to budget for.

Let’s look at some of your maintenance contract “options.” Epicor Contract Management and Service Management signs you up for expensive and controlling service contracts. SAP also offers Annual Support and Maintenance through different support packages. Oracle follows suit with varying levels of support packages from Premier to Proactive. It’s obvious why these ERP companies love maintenance programs: these are easy checks to collect. After a month, you’ll be reliant on both their weak software and poor customer service.

The Trap

The final kicker with maintenance costs isn’t that you’re paying a large sum for very little. It’s that your bill is only going to grow. A lot of ERP companies raise their maintenance costs on a yearly basis. That budget you set out when you purchased your ERP? Plan on updating it with increases in the maintenance column.

You may be hoping that your surge in costs will lead to more answered phone calls from your ERP provider. I take no joy in this piece of bad news. The quality of the service you receive will stay the same, which isn’t saying a lot.

A Final Force of Hand

When an ERP company releases a newer version with updates, whether you’d like that update is not exactly optional. ERP companies slyly control this outcome by simply saying, “we will no longer be supporting version 1 and will only support version 2 by March.” I don’t remember being taught to take away a business’ free will as a good practice in business school. I wish it stopped there. The ERP company is going to make you pay separately for that update.

It’s obvious why the ERP company is doing this: money. They get to count on different revenue streams from you after you purchase their ERP. Your bill grows and so does their smile. I just wish they weren’t the only ones having fun.

The Recurrency Approach

We take a different approach to billing our customers and the foundation lies in transparency. We want you to know exactly what you’re paying for and how much you should budget. With Recurrency, it’s a flat monthly fee and, unlike other companies, you can count on it to not unexpectedly rise one day. When it comes to updates, they’ll be helpful, without an extra cost. Our focus is on helping your business run to its fullest potential.

Remember that hefty maintenance fee that gets you unanswered phone calls? We don’t do that here at Recurrency. Let us know what you need, and we’ll figure out how to make it happen. Our close relationship with our customers is something we hold dearly here and it affects the way we build new features.

So, let’s talk about costs and updates and fast software sometime. It’s your turn to smile. Book a demo today.