10 Reasons Independent ERP Consultants Are Like Real Estate Agents

10 Reasons Independent ERP Consultants Are Like Real Estate Agents

- by Sam Gupta, Expert in WorkTech
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Buying a house is easy. Anyone with common knowledge can buy. Anyone can figure out how many rooms or bathrooms they might need. Most people know how to select a color or texture independently (or maybe by making a few calls to trusted friends). So why do we hire real estate agents (or independent ERP consultants)? Is it a dumb move? A waste of money? The problem could be much more involved, too, especially if the house needs some construction or modification.

Do you need a real estate agent? 90 percent of people would agree that you are better off hiring a real estate agent than buying independently. With architects, however, you might not even have a choice, as the city regulates it. They are doing this to ensure the interest of both buyers and sellers are protected. Sure, real estate buying is a leveraged procurement, so you have a much higher risk, and sometimes, your bank might mandate a licensed agent to protect their investments.

When you buy an ERP, the total cost might be anywhere from 5-20x more in price, depending on the organization’s size, with a lot more complexity. With an ERP, your purchase might be based entirely on cash, but wouldn’t it be in your best interest to take the same approach as an expensive procurement, just like a bank or an insurance company would? And while the ERP procurement process may not be as regulated, the role of independent ERP consultants is very similar to real estate agents, architects, real estate lawyers, and much more. So what are the top reasons independent ERP consultants are like real estate agents? Let’s take a look.

Sam Gupta - Figure 1

10. Ability To Expedite The Process

If you try buying a home independently, the process will go something like this. It might start with taking everyone’s opinion. Maybe someone is fighting for the best kitchen, while the kids are looking for a personal washroom, swimming pool, or sizable backward. Or, perhaps you’re just praying that the process finishes in the allocated time and budget (with a house in one piece).

You might make several rounds of open houses—with lots of money spent on gas and family lunches. Sure, you could account for this as family bonding and time. I get it. But you are burning time and cash (and opportunity cost, if you care for that; the smartest people do).

Here is how a real estate agent would manage the process. First question. Do you guys have bank approval? No. Do you know what you can afford? Maybe $400K, based on Dad’s income. You might not get the best appliances for that range, and let’s keep the swimming pool for the next home once you figure out how to make money on your own. You get the point! The real estate agent has saved six months (and a ton of money) without making a single trip. The bigger the family, the more challenging it will be to manage it internally.

ERP procurement process isn’t different, except everyone struggles to articulate why you need to hire professionals to manage the process, including independent ERP consultants, even though they do this for a living. Their experience and structured approach help expedite the process exponentially.

9. Offer A Structured Framework

A structured framework is essential for successfully procuring and adopting a house or ERP. You might argue that real estate agents don’t add much value. What’s a big deal in creating a few listings and driving around to check several houses? Can’t you do it on your own? Is it worth paying them 3-6 percent of the transaction? Most of us underestimate how much thought and work goes into that process.

Consider decisions such as putting an offer on the house without knowing whether you will get approved. What if the agent of the seller has a clause for non-approval penalties? OK, this might be intuitive for you as you probably know how to read contracts. But there are so many things that could fire back when dealing with such expensive investments. Also, just because you may be an expert at buying and negotiating another category doesn’t make you a qualified real estate agent. They go through years of training, certifications, and experience to develop a structured framework that makes them successful with a similar customer like you.

You need to have a structure for developing criteria, defining success, building consensus, narrowing down options, and reviewing only the options that might be relevant to you. Otherwise, the buying decision might be put on hold forever without making any progress for the family. A structured framework that independent ERP consultants provide is more than spreadsheets and checklists. Creating a similar framework requires you to go through many rounds of buying and selling similar houses (or ERP) and incorporating lessons learned on an ongoing basis.

8. Help Building Consensus

The ability to build consensus is more than just voting and a bunch of surveys. It requires a deeper understanding of everyone’s motivations and overall implications on the technical and financial model. The only difference between building consensus for a house and ERP is that with ERP, you are probably creating the consensus for the whole city, not just one family or home. There might be religious and political factors that might throw off the entire technical and financial model. What if the technical constraint of your city requires you to build a canal through the city, but the local population would not allow it because of their religious beliefs? What if the alternate model is more expensive than what the city can afford?

Once you have dealt with thousands of factors like those, you learn how to negotiate with them. And this expertise would not be possible internally unless you are dealing with them daily. Independent ERP consultants are not only your “real estate agents,” but they are also your “marriage counselors.” Unless you have gone through multiple ERP implementations yourself, it’s hard to understand why building consensus across all parties, including internal stakeholders, consultants, and vendors, is so hard with ERP implementations.

7. Ability To Negotiate Contracts

Negotiation is not about asking for discounts—it’s about reading the room, understanding everyone’s motivations, and understanding what you will lose by gaining something. Think of how easy you are making for the seller’s real estate agent if no buyer’s agent is on the other side. The ERP salespeople are professionally trained negotiators. ERP companies have hired “real estate agents” as they know how “uninformed” an average buyer is.

The seller’s real estate agents have done deep research on you, how you think and feel, and identified your weakest spots. They are likely to hit the weakest person the hardest. The only way to counter the seller’s real estate agent is to have a “real estate agent” on your side to predict every move and have a counter strategy. That’s where independent ERP consultants come in. Not that they are smarter than any of you, but only a real estate agent would understand how to work and think like another real estate agent.

They know every ERP ecosystem in and out, research pricing and discounting daily, and keep track of macro and micro developments with most ERP vendors. As well as having access to thousands of quotes, they can dig to discover the discrepancies in the contract, help you save with unused software, and compare the prices at the line level. Not hiring a real estate agent on your side is the best thing you can do to help a seller’s real estate win. The worst part is that they will make you feel like you WON when you might have lost.

6. Ability To Architect And Design

Imagine if buying a house requires a real estate agent; how hard would it be to modify a home or construct it from the ground up? What if you go through the construction process only to demolish and construct again? What are the odds that you will be successful with construction if you haven’t figured out how to design on paper before laying down the bricks? You might go through several rounds of construction and demolition when you realize that you are already over budget—or worse, bankrupt.

This is how any ERP development, customization, or integration process goes. Architecture and design are not just about the technical components that must work together. Everything needs to line up: financial, technical, processes, licensing, or legal. The construction and demolition process might go on regardless of whether the disconnect is between the process and technical model or between the financial and technical model.

Like construction or real estate, ERP implementation requires multi-disciplinary skills—depth in every skill you can imagine. Your independent ERP consultant is not only your real estate agent. They also help with the architecture and design. But most importantly, figuring out what someone wants when they grow up, and you can’t do that unless you deal with thousands of people on a daily basis.

5. Ability To Uncover Your Needs By Analyzing Your Current House

What are the odds that you will be able to remember every single feature of your current house? What if the features you took for granted in your current home might not exist in the new one? Most companies would struggle to articulate 40 percent of their processes. Sometimes they might reside inside a spreadsheet and others in someone’s head. Articulating the current house is critical as it helps someone understand how their life will change in the new house and helps perform the fit-gap analysis to understand the efforts required to build the to-be model.

Unfortunately, the internal teams would always struggle with how much they might be keeping in their heads. The independent ERP consultants help you articulate the as-is model as they deal with similar people daily. Also, they are not just relying on one person to provide the input but are connecting dots through multiple sources by deeply studying your processes, analyzing your data, process mining, and doing the rinse and repeat with the interviews and analysis until they get the as-is model that can stand on its feet.

4. Ability To Blueprint Your To-Be House

If articulating your current needs is harder, who can forecast which house you will need in the next 5-10 years? What if you get an unexpected baby you didn’t plan for and need a bigger house in the near future? What if your aunt decided to stay permanently in your home because she didn’t have a place to stay?

Articulating your to-be state requires working with similar businesses at various life cycle stages and understanding how the processes evolve at each growth stage. If your family members don’t have experience living in a larger house, the upkeep that will be required from their side, most likely their expectation of the to-be state, will be very different. And they might not like it once they start living in the new house.

This is where independent ERP consultants help visualize how the needs change at every stage of the company’s lifecycle. As well as helping them understand the critical decisions they need to keep in mind as they plan their to-be state. They have already seen the odds of unexpected babies or aunts. So they can coach you on the possibilities you need to plan to ensure that your model has some legs and will not break even if the context changes substantially.

3. Ability To Manage Change

Who would remember that you are supposed to write “fragile” on the box likely to break during the move? Your grandmother could keep track of every detail as moving is probably the most exciting thing she’s done. But let’s face it; most of us don’t even remember 10 percent of what we did yesterday.

Changing an ERP is like moving the whole city. You have a lot at stake. Even a minor disruption with one process could mean millions of dollars in loss. The challenge with ERP implementation is that things are so invisible that even experts struggle to keep track of the change process.

Also, technical teams are extremely poor at documentation, as documenting a puzzle is not as mentally stimulating as solving and playing with the puzzle. The change process requires a methodical approach to managing a good state of requirements, which lead to quality test and release plan. Unfortunately, unless you move cities daily, you will likely forget the critical steps, causing unexpected disruptions.

2. Ability To Uncover Financial And Technical Risks

Good real estate agents have a deep understanding of their neighborhoods. They understand where the foundation issues will likely be in an area and have intelligence about houses with cases that might impact the financial value due to desirability issues. They can tell you where you might need to hire a professional inspector, where the mold is likely to develop, and that it might require a costly repair.

Without a real estate agent, you will likely be concerned about getting the best deal but miss the big picture. What if you got a house valued at $100K because of a suicide in the house? But they sold as if you were getting a 50 percent discount on a home worth $400K? Only a real estate agent who is an insider could uncover these deeply rooted financial and technical risks you may not encounter even after living in the new house for a long time.

The only difference between an ERP and a house is that the mold is so deeply spread with some of the ERP systems that you might not understand how bad it might fire back in unexpected ways: getting sick for no reason.

1. Access To Proprietary Intelligence

Real estate agents not only have access to proprietary databases such as MLS. But they might maintain databases of different successes and failures based on their recent successes and failures. If you decide to do this independently, you are never likely to have access to this intelligence. They keep track of other real estate agents, how they negotiate, and the compensation structure of different companies.

The ERP consultant keeps track of every vendor, whether reseller or OEMs and consultants, and their experiences with any specific ERP systems. They keep track of the vendors likely to white-label the consultants, increasing the scheduling risks. Or the ones that might deploy junior resources and the industries in which each vendor might specialize. Also, keeping track of any technology and data model changes. This proprietary intelligence is not possible without them. Independent ERP consultants can offer insights that you may have never had.

Final Words

The procurement cycle for each category is substantially different. The more expensive and disruptive the purchase, the more subject matter expertise you might need. It’s hard to describe why a particular real estate agent is better than the other. But if you pay attention, they have undergone years of training and cycles to master their craft.

It’s in the best interest of ERP companies not to see an independent ERP consultant on the other side, as it makes their job harder. But you are hurting yourself by not hiring one. Like a real estate agent, an independent ERP consultant’s job is to protect the interests of buyers and sellers. So don’t undertake an ERP selection alone when you barely understand the space.