We’re Not Charging Enough for Microsoft Dynamics GP

I don't think that we're charging enough for Microsoft Dynamics GP. I can hear the howls now from partners who replace 10 user QuickBooks installations with Dynamics GP. How can I pronounce such sacrilege? Let me offer the other side of the argument. For enterprise implementations, I don't think we're charging enough.

In an enterprise engagement, especially when replacing SAP or Oracle, the amounts that companies are charged for those systems is astronomical - often well out of balance with the value received. Dynamics GP pricing certainly comes in lower while regularly delivering comparable value but if it comes in too much lower it destroys the opportunity by being too cheap.

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About Mark Polino

Mark Polino is a Microsoft MVP for Dynamics GP and the Director of Client Services for Fastpath. He is author or coauthor of five books on Microsoft Dynamics GP. Mark has been working with Dynamics GP and its predecessors since 1999. He is a Florida licensed CPA and holds an MBA from Rollins College.

Building Dashboards with Microsoft Dynamics GP 2013 and Excel 2013Mark's new book, Building Dashboards with Microsoft Dynamics GP 2013 and Excel 2013, is available now.

 

 

 

 

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Value engineering and delivery

I am right up there with you and this argument. We at IntellPartners are looking more at the value delivered, rather than a straight cost represented by hours and licenses. This also helps the customer as they can quickly grasp the overall cost of the implementation, including software and maintenance services. I believe this speaks greatly to a trend I have seen happening across the various segments of the Professional Services industry since the economy took a dive: consultancies, law firms, field service, etc., and any other delivery model where the pricing is assessed on an hourly basis. Finally clients are realizing that it's not about the number of hours, but the value that an organization can deliver. This is true for the enterprise segment, just as much as it is true for the middle market. If companies perceive they are getting value out of your proposition, then ultimately, pricing - while still a factor - becomes less contentious at the negotiation table, and much less of an argument to close a deal.

Software (and certainly Dynamics GP) is just one of the components in value delivery. Organizations that are engaging consultancies are more focus on the total package.

Great article!

MG.-
Mariano Gomez, MVP

Value Proposition

Selling value makes the decision on pricing a "no-brainer"; however, who pays for the determination of the solution's value before a decision is made to buy it?

There should be a Sure Step template based on macro-level parameters of a prospect client's business environment, that can instantly produce a "ball park" value for a GP implementation.

Follow Up

A couple of days later Seth Godin posted this http://bit.ly/okLWcD including:
"Are you confusing what you pay with what you get? (Does expensive advice feel more valuable than the free stuff?)"

Mark

Pricing

This sounds like a greedy reseller looking for an excuse to over charge a customer. One of the reasons that clients move from Oracle and SAP is down to the ridiculous initial cost, the annual licensing costs and the daily rates that are charged for these overpriced systems. This market is already saturated with overpriced software vendors and this is the main reason companies like SAP are targeting the mid and SMB sector which GP already dominates due to the fact that they provide a quality system at an affordable price.

Re: Pricing

This sounds like a greedy reseller looking for an excuse to over charge a customer.

Well said!!

Somebody got robbed!

Who in the world is moving from SAP/Oracle to GP? If GP suits their needs they really got robbed the first time. SAP/Oracle doesn't even compare to GP. I don't even see why they bother competing. Sounds like someone bought a bus to carpool to work. Sure, you can load 80 people on it, but look at how much it costs to carry four people to work. GP is like a small car. It's not fancy and certainly not impressive, but it gets you where you need to go and gives you the bang for your buck. When you need to start bringing 80 of your co-workers along, then you go buy a bus.
Most companies looking at GP shouldn't even think of buying SAP/Oracle. They are far too complicated to get started. And companies big enough for SAP/Oracle shouldn't be looking at GP either. Can't fit 80 people in a small car, unless you're clowns ;).
Just shows the importance of doing the research before you start meeting with the vendors. Make sure you know what your needs are before you jump in and pick an ERP system. Else, you get stuck driving a bus to work.

Mercedes/Lexus

Regarding the Mercedes/Lexus analogy, Idon't believe it applies. I own a Mercedes and a Lexus. As a GP user, I would say that GP is no Mercedes or Lexus for that matter. I would compare it more to like my off-road Jeep. A little rough around the edges, but has the basics and if you want higher performance, you have to buy a lot of add ons.