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Owner Wants IT Involved to Minimize Costs

  • 1.  Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 12:28
    I am seeking recommendations for how to respond and proceed with getting this customer upgraded to version 2019.

    99% of the upgrades I do are value / fixed price options.  This customer has had several resellers.  They were with a couple of other large resellers then changed to me for 10 years, changed to other resellers a few times after me, and changed back to me a year ago.  They now want to upgrade Sage 100 from v2015 to v2019.  They would like to be billed as time incurred instead of a fixed price.  I probably should have insisted on a fixed price, but I was reluctant to make an ultimatum particularly since they are price sensitive.

    Below is an email I received from the owner and then an email from the IT person the following day.

    Email from the Owner:

    I just spoke with our IT person and he's preparing a server with Windows Server 2016 for Sage 2019 installation and testing. He mentioned he has a few more recent patches to add.

    The CFO is concerned about the cost we may have in addition to the outside custom programming, namely how much Visual Integrator work that will still be necessary. Our email chain below showed you already had three hours into that work and billed us for it, so unless you feel there will be significantly more hours needed for that, I'll assume that any additional VI time will be billed along with your time for upgrading and testing our updated Sage software.

    We hope that you may be able to utilize our IT person as a resource where appropriate, to help minimize your time on things he could do with your direction and allowing you to focus on tasks you are best suited for -- thereby optimizing our overall costs.

    Email a day later from the IT person:

    I have prepared a server with Windows Server 2016, loaded Sage 100 ERP 2015, copied over all data from our production server & tested. I have the 2019 software downloaded and ready to install but wanted to check in with you before I go any further.





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    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
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  • 2.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 12:54
    Edited by Wayne Schulz 07-28-2019 13:01

    Sounds like what they want is a not to exceed fee arrangement. Good luck making any money with that.

    PS - The answer to consider in the future is "I don't have hourly rates or any way to bill hourly".

    PPS - As soon as you give a fixed estimate plus an hourly rates/hourly estimate = you just stepped into the not-to-exceed landmine.

    PPPS - Doug, you can't be a "little bit pregnant". You either bill fixed fee or you bill hourly ( or some variation ) - if you waver when you talk to some customers they smell it and back you into a corner - just like this one has done.

    My suggestion here is to honor the agreement you made with them but do not let them get one day over 30 days past due with you. If they go late then stop work.  I'd probably bill them promptly each week for the current week's work.

    This is a "D" level customer ( at best ). You have nothing to lose by standing your ground on being paid promptly. The IT guy is probably going to call you every 5-minutes and the owner is going to complain that you're billing him for quick calls which should be free. That's the biggest reason I left hourly billing years ago.



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    Wayne Schulz - Schulz Consulting - 860-516-8990
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  • 3.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 14:30
    What about the issue with the owner wanting the IT person to "help" with the upgrade?  Having the IT person help is a potential liability.    Is there any part of this upgrade I should trust an IT person doing?  Workstation installation after I show him how?

    ------------------------------
    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
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    Original Message


  • 4.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 18:40
    Most IT people don’t want to be that involved. I’d give them the supported platforms and put them in charge of running workstation setup.

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    Wayne Schulz - Schulz Consulting - 860-516-8990
    ---------------------------------



    Original Message


  • 5.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 14:32
    The good news is that this customer has always paid promptly and never questions an invoice.  They just press to keep the bill low.

    ------------------------------
    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
    ------------------------------

    Original Message


  • 6.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 22:19
    The bad news is this customer is a VAR hopper/shopper. They probably are not going to be loyal. Don't invest much in this relationship. I will take these type of customers on but internally I know they are usually with me a very short period of time and I don't take it personally. I also tend to price them a bit higher than someone who hasn't been with a series of partners in a short amount of time.

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    Wayne Schulz - Schulz Consulting - 860-516-8990
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    Original Message


  • 7.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-28-2019 23:20
    Thanks for your input Wayne.

    ------------------------------
    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
    ------------------------------

    Original Message


  • 8.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 00:40
    I agree with everything Wayne said. I will add two more thoughts.

    1) The sudden imposition of IT implies to me that they think your proposals are too expensive. They want cheaper. This might well be over IT's objection, as Wayne pointed out. This is a shot across your bow for the future.

    2) In my experience, fixed-price is good, but unless you're offering 2 options, Good-Better-Best, they can't judge the value against anything that "feels real." Hence, they assume you're padding. Only for the really small stuff do I quote 1 price, and even then, only rarely. 

    The challenge is to structure 3 options. It gave me headaches at first. But it works. For most proposals I set a price for the "good" level to be what I think they'd find as competitive if they shopped it. But that is a really bare-bones job: fast response, 1 pass on approvals, strict req's for the server that is pass to us from IT, no training, etc. I then add features to increase the discernable value such that the "best" option is 2.5-3x higher. I rarely have anybody buying the good. 

    Call me if you'd like to explore this further.

    ------------------------------
    Jerry Norman
    President, 90 Minds
    Smartbridge Partners
    512.419.1444 x112
    ------------------------------

    Original Message


  • 9.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 10:09
    Thank you Jerry for the response, and appreciate the offer to discuss your quote methodology.  I always offer three options for the fixed price work: Level A, B, and C.  I would like to discuss with you the differentiators you use for upgrades.

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    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
    ------------------------------

    Original Message


  • 10.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 10:33
    Regarding those who want to install on their own.  I usually commend them on the idea, and to avoid me having to get documentation afterward, or having to redo parts of it, I suggest we spend 30 minutes walking them through the share and permissions, and what you definitely must not do, etc. and before that call is over, I'm usually doing the install. I mean, in the end, they feel involved, but I got to control the installation.  

    Regarding VI jobs and importing, I just penned an email this morning loosely along these lines. (And we have a good, better, best option for implementations that allows a savvy accounting or IT type to populate our excel templates, with our guidance, but these guys are charging onward because they have a smart power user on the staff who has worked with Sage 100 before)
    "We can provide a bundle of Excel templates and VI jobs for a fixed fee"  "It would be irresponsible to provide this, without guidance, for SOME tables where you're likely to shoot yourself in the foot."  "What tables do you want to import?"

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    ==================
    Rhonda McNamara
    Customer Success Manager
    Stewart Technologies, Inc.
    rsm@stewarttechnologies.com
    ------------------------------



  • 11.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 10:51
    IT time is not free.  They may save on consulting costs, but with expertise comes efficiency.  What is handled routinely by a sage Sage 100 consultant might be something IT would struggle with for a couple hours / days. 
    Also, there is a difference in the end result of someone implementing their hard earned "best practices" setup, and what IT can "figure out on their own". How much user time will be wasted down the road because something less obvious was not done the way you'd do it?  Being called in later to fix someone else's mess is always harder than doing it your way from the start.
    Workstation setups we have customer IT handle... based on our instructions.

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    Kevin Moyes
    Technical Systems Analyst
    Munjal White Consulting Co.
    Toronto ON
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    Original Message


  • 12.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 11:01
    Great comments! 
    Rhonda - I've found, like you, that the key to handling IT is finding a way to invite them in without making them in charge. We have a financial services customer with tight controls on access, so IT always has to babysit us. We control this by requiring x days of notice for a session, and a penalty for cutting a session short. We send clear security requirements to them ahead of time, and have penalties for not meeting them by the time we have the session. 

    Like your experience with VI, we've concluded that it's a mistake to overestimate the customer's competence, understanding of the task, or interest in learning how to do it. So, generally, delivering a package of templates for nearly free works, because we make money on their implementation/support -- as long as that option is defined *before* the customer buys. That means the "good" option is just the template with no support. When they see that help is explicitly a separate value, their resistance goes down.

    @Doug Higgs - I'd love to talk. Sounds like we can each learn from each other.


    ​

    ------------------------------
    Jerry Norman
    President, 90 Minds
    Smartbridge Partners
    512.419.1444 x112
    ------------------------------

    Original Message


  • 13.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 15:45
    Thanks Rhonda for sharing your experiences.

    ------------------------------
    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
    ------------------------------

    Original Message


  • 14.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 13:49

    It's also ok to say no.
    We are in the process of buying a house.

    The attorney handling the closing sent us this in his retainer letter: 

    "I have agreed to handle your closing provided that you do wish to obtain and purchase an owner's title insurance policy through this office. I do not represent clients who do not purchase an expanded owner's title insurance policy. This office does not represent purchasers who rely upon the seller-provided title and title insurance."

    There's nothing wrong, IMO, with being clear up-front about what your rules of engagement are. 90% of the users are going to be ok with it. 

    Almost 100% of these problems are solved by having and communicating rules in advance.



    ------------------------------
    Wayne Schulz - Schulz Consulting - 860-516-8990
    ------------------------------



  • 15.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 14:32
    You bring up an important part of the fixed-price proposal process: you can't really do this without specifying most of the rules of engagement: who will do what, what happens if the customer doesn't do it on time, system expectations and the cost of not meeting them, response and delivery time frames and penalties for missing them.

    This can be tedious, but once you figure them out for yourself, you merely tweak them for the customer and nature of the 3 levels. One of the things that surprised me about the 3-level approach was that the customer was much more engaged with understanding what they would get for a level and the differences between them. We lay the rules, the expectations, in those comparisons and more of them get communicated upfront. It makes the expectation-setting process (always necessary in an agreement, but too often merely implicit) much easier.

    ------------------------------
    Jerry Norman
    President, 90 Minds
    Smartbridge Partners
    512.419.1444 x112
    ------------------------------

    Original Message


  • 16.  RE: Owner Wants IT Involved to Minimize Costs

    Posted 07-29-2019 15:41
    Great point Wayne.  Communication is one of the primary keys to good business (or in any relationship).  This has been a good customer over the years.  They left me after 10 years of what I believe was good service.  The owner told me he was leaving because he thought a change to a larger reseller might allow him to get products and services that I either wasn't aware of or were not in my skill set.  Six years later he returned, and, in my exuberance of having them back as a customer, I failed to communicate to him that my business practices have changed in those six years we were not doing business:  ie We now only use value pricing.  I will honor this project and have a discussion with him after we go live.

    ------------------------------
    Doug Higgs
    Assistant Technical Support / Building Maintenance Specialist
    Midwest Commerce Solutions, Inc
    ------------------------------

    Original Message


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