There seems to be a steady stream of news related to ERP vendor Epicor (Full disclosure – I work exclusively as an independent consultant with a competitive ERP product). The latest lawsuit from Major Brands claims that Epicor over-promised and under-delivered on a $1,000,000+ software and services ERP engagement.
According to the lawsuit the initial cost of $500,000 in software licenses and $ 670,000 in services (to be provided by Epicor directly because “there’s only one throat to choke”) not only ran past the initial go-live date of “mid 2011″ but also doubled in price and according to the suit Epicor eventually admitted the software they’d recommended was ” not suitable for Major Brands’ needs and that it would not perform as previously represented”.
By the time Major Brands filed suit Epicor was indicating that their net version, ICE 3.0, would fix everything – but not until it was available in mid 2012.
During the testing, the V9 software was so ill-suited for Major Brands’ needs, no invoicing or shipments were able to occur.
- What type of due diligence happens before a company spends $1 million on a software project? In this case it would seem as if the most that was done was some type of free demo and followup — “the company gave Epicor a detailed accounting of its business processes and transaction volumes, according to the complaint. The company also allowed Epicor personnel to “visually observe all aspects of its order entry process [so] it would understand Major Brands’ needs and requirements and the processed involved.”
- Is the software publisher really best suited to deliver implementation services in this mid-market space? Here, according to the suit, Epicor represented that they were the best resource because there would be only “one throat to choke” if things went wrong. Ultimately for Major Brands it may turn out that Epicor was most favorable not because of a throat chokehold but deep pockets when the system doesn’t activate as they claim.
In an environment where software publishers are desperate for new sources of revenue it’s tempting to think that taking on the role of implementer is an easy road to high margin profits. And in some cases where the implementations are cut and dry that may be true. Increasingly the bulk of implementations , such as Major Brands which was replacing a 20 year old system, have some type of quirk that requires more than a free demonstration and conference room meeting to uncover.
Current best practices include a paid conference room pilot – or at least rolling out the software in test phases prior to jumping in with both feet. Companies who have stayed on software for 20 years (though Year 2000 scares, upgrades to Windows) almost always have some type of special needs inherent in their old software which make a migration challenging. Most experienced VARs recognize this. It doesn’t sound like in this case Epicor did.
The message for software publishers – be careful what you wish for (one throat choke) – because you may get it.