I, too, have concluded that any ISV-run implementation project should have PM done by the partner. IMO, this is especially true for any firm that's not big enough to have internal experience with PM of a tech implementation. I have not yet encountered an ISV capable of truly handling a small-ish, low-tech customer.
Remember that nearly all of these ISV implementations include a "have your Sage consultant do this ..." somewhere in the project. If you still bill hourly, make sure your rate for this AT LEAST match's the ISV's. We are only fixed-price, so we have high-ish fixed-fee "incident" events for likely categories.
So far, I charge 15% of the initial estimated "project" as the fee. This is paid in advance based on the ISV's estimated implementation, and then updated up or down quarterly based on actuals. There are a couple of ways to build on this concept, depending on the size and nature of the ISV product. In one case, I based the "project" size on actual implementation charges PLUS the total subscription fee over 12 months.
My proposals are transparent about the fee basis. However, it is very, very important to offer 3 levels. The lowest one is "no involvement." The agreement must be clear that "no means no." The next option is one where we assist the customer in project management, especially in translating "ISV-speak" into normal language and meanings.
The highest one (15%+) assigns us as the customer's PM. This takes advantage of our knowledge of both the ISV & industry, and the customer's internals. When presented with these options and the reality that none of our customers can actually manage a project longer than 30 days, they have all selected Door No 3.
If you are only dealing with IT, I suspect this is a near-impossible sale. If you have a decent relationship with the Controller or higher, they generally understand the risk you are offering to reduce.
One advantage of this approach is that we end up knowing the customer's details of this enhancement and can productively offer first-line support on it through our annual agreement, if we choose.
------------------------------
Jerry Norman
President, 90 Minds
Smartbridge Partners
512.419.1444 x112
------------------------------
Original Message:
Sent: 10-10-2019 06:43
From: Wayne Schulz
Subject: The new landscape: Shrinking ISV ( net ) margins
I do agree there needs to be a project management fee. There is a lot the customer looks to us for just as Bob described.
Customers will try to decline the fee as not needed. They can self-manage. But when there is a problem we will get the call and be expected to step up to the plate at no cost or to "fix" something that's likely beyond our control.
Perhaps 3 options
1. Basic project management
2. Above plus we attend kickoff meet
3 Above plus we attend first training
Maybe have three different $$ tiers based on the complexity of the enhancement.
An extended solution is typically the least costly. All the way to an Altec or WMS.
Remember too that every enhancement makes support much more time consuming because you start with Sage who typically blames the ISV and then you're off to play detective with two or more finger pointing support areas. And once they recommend installing a PU you need to reinstall the integrations.
---------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
---------------------------------
Original Message:
Sent: 10-09-2019
From: Bob Pfahnl
Subject: RE: The new landscape: Shrinking ISV ( net ) margins
I would propose billing Altec services on our paper and adding a $ or % project management fee, either itemized or bundled. Whether we recommended the solution or not, our client will expect us to manage the publisher or solution "because you know us and what we need". If we don't, then we are looked on as not caring, interested, or by our silence attesting that the publisher will take care of them as we would, e.g. eRequester/Workplace, INSYNCH, CIMcloud.
------------------------------
Bob Pfahnl
General Manager - Silicon Valley Office
DSD Business Systems
CA
408-641-0922
------------------------------
Original Message:
Sent: 10-09-2019 16:55
From: Shawn Slavin
Subject: The new landscape: Shrinking ISV ( net ) margins
Wayne,
When I was with CS3, we probably sold 10 to 15 docLink deals. They made the same offer and at one point in time, we had enough active installs to justify bringing a person up-to-speed to do most of the implementations ourselves. When the employee retired, we didn't try to train a new person. I always felt that if you couldn't sell and implement at least 3 any new application or system per year, you shouldn't invest the resources to create a new business line because it is very difficult to get and be efficient enough to make a good profit.
We could never get them to budge on the cost of the services and we didn't feel there was enough value to justify putting an additional margin on the sale.
------------------------------
Shawn Slavin
CS3 Technology
Original Message:
Sent: 10-09-2019 15:52
From: Wayne Schulz
Subject: The new landscape: Shrinking ISV ( net ) margins
I had lunch with Laura Lechien and Linda Turner from Altec. I brought up my concern that not all the revenue from the sale of Altec was subject to commission.
Supposedly Altec is working to get the OCR piece on the Sage price list ( ? )
The professional services can be billed through the partner ( as I noted in my first correction ). Altec also offers certification so that if you do enough of these you could pay to get certified and do the entire implementation yourself.
I mentioned that some ISVs do offer a commission on the entire sale including services. I didn't get a really good answer as to why that wouldn't be possible other than there are additional options to either re-bill or do the professional services piece yourself and bill the customer.
------------------------------
Wayne Schulz - Schulz Consulting - 860-516-8990
Original Message:
Sent: 10-03-2019 13:37
From: Bob Pfahnl
Subject: The new landscape: Shrinking ISV ( net ) margins
Did Altec not permit services priced/billed on your paper? That would be a show stopper for me.
------------------------------
Bob Pfahnl
General Manager - Silicon Valley Office
DSD Business Systems
CA
408-641-0922