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ERP Software Financing: the future? - overview for company owner
By Andrew Karasev
In our case - we serve Microsoft Business Solutions ERP and CRM products: Microsoft Great Plains, Microsoft CRM, Navision, Microsoft RMS, as well as we do customization and integration to these products. We would like to share with you our experience with financing through Microsoft Financial Corporation, the entity handling software financing for Great Plains, CRM, Solomon, Navision & Axapta.
• 0% interest financing. Well - this is probably a dream or something that should not be practiced (otherwise you compromise MRP list price). However, considering the nature of software - this is something that costs nothing to sell - assuming that all the software development expenses and costs are already behind. From time to time Microsoft Business Solutions practices this 0% financing. Right now (June 2005) new customers are enjoying this promotion
• Increasing Number of Clients - who use financing. Last year we saw clients who were trying to increase their market share, by fueling their efforts with financing of all the kinds, including MBS financing. This year we see regular clients, who are using financing just to stabilize cash flow. Some of these clients have enough cash to purchase the system, but they still finance.
• Car vs. House financing. This is classical American dilemma. In my personal opinion - you can not pay upfront the price of the real estate, so you use mortgage to finance you house. However, again this is my personal opinion - car financing is something you should probably stay away from, because car loses value as you leave the dealership place - you can not sell the car on your own for the same or similar price. Software is very challenging asset - from one side - ERP might be something your business get he market value on, from another side - if it is not implemented or implemented only half of the way - it might be the burden. Maybe you, as business owner have to do your homework long evening and weekend hours to decide on your MRP financing.
• Consulting Paradox. This is something I would prefer to keep silence about and tell when I face to face with the prospect. You can finance not only the software, but also the implementation. Imagine the situation, when Microsoft Business Solution Partner gives you the proposals where Software list price is k$25 and estimated services to implement the systems are another k$25. You can finance k$50. And if you catch 0% promotion - you finance services at 0% and the most amazing fact is - MBS Partner will get the money upfront from Microsoft Finance Corporation for both pieces (k$50)
• How to trade your system in? if you or MBS partner failed to implement - is it any known way to trade in the system. Well - this is the place where we would like to stress - consider first to be conservative and do not use financing…
Good luck with financing, implementation, customization and integration and if you have issues or concerns - we are here to help! If you want us to do the job - give us a call 866-528-0577 or 630-961-5918! help@albaspectrum.com
About the Author
Andrew is Great Plains specialist in Alba Spectrum Technologies ( http://www.albaspectrum.com ) - Microsoft Great Plains, Navision, Microsoft CRM Partner, serving clients in California, Minnesota, Illinois, Washington, Florida, Arizona, New York, New Jersey, Virginia, Georgia, Louisiana, Texas, Canada, UK, Australia, Brazil, Germany, Russia
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