Independent software vendor (ISV) selection – A critical step to profiting from your ERP investment 

In today’s rapidly changing business environment, enterprise resource planning (ERP) software has become an invaluable tool for the success of companies. Selecting the right independent software vendor (ISV) or solution provider is crucial. Organizations should maximize their impact and get the most from the services provided. Companies need a well-tailored approach based on their particular needs and business objectives.

What is ISV in ERP?

An independent software vendor (ISV) is an entity that sells software products compatible with ERP software. ISV solutions help improve the functionality of the software ecosystem by adding features not found in ERP enterprise software.

ISVs differentiate themselves from other software and hardware providers because they create solutions for software that already exists. ISV partners take advantage of today’s cloud marketplaces to offer their ERP solutions on a software-as-a-service (SaaS) basis. Hybrid cloud platforms or public clouds like Amazon Web Services (AWS), Salesforce AppExchange, and Microsoft Azure can be used to market and sell software for ERP.

What ISV Solutions are available?

ISV-provided software opens up a world of endless possibilities. All day-to-day business operations, from accounting to drop-shipping, can be impacted by the implementation of ISV.

The potential functionality of ISV can help include many processes, including the following:

  • Reporting
  • Manufacturing
  • ECommerce
  • Tax compliance
  • Business intelligence and analytics
  • Quality control and monitoring
  • Warehousing and distribution
  • EDI

ISVs for ERP

ISV business partner programs offer companies various add-on functionalities for their ERP systems. Critical business areas such as production, customer service, supply chain, financial, and reporting may be positively impacted by ISV software.

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Why independent software vendors (ISV)?

According to an IDC survey, 55% of companies want to enhance their product and services digitally, and 49% want to future-proof their business. In the face of constant change, companies can leverage ISV partnerships to build a more robust business ecosystem and become digitally resilient.

Although most ERPs cover the basic technology needs for businesses out of the box, your company might require the help of ISVs who offer industry-specific solutions and enhanced functionalities. By integrating their solutions into your ERP’s core, ISVs help complete your existing platform while keeping users in mind and your business goals on track.

If you’re thinking of taking this next step, this article is a guide to help you choose the right ISV partner to take your digital transformation to another level.

 

Benefits

In an increasingly digital world, businesses have noticed gaps in their current processes and negative impacts on supply chain relationships and staff engagement. In a recent survey, 74% of businesses reported shutting down during the pandemic due to not having the tech to digitize”.”.

Thanks to their specially designed technology and expert knowledge, ISVs can help you meet the unique needs of your industry and eliminate inefficient processes. By finding an ISV that can integrate its solutions into your ERP, you can seamlessly jump from one application to another quickly, securely, and without compromising essential data. Additionally, most ISVs provide extensive support and resources, significantly reducing stress and errors for your teams.

Potential challenges

When a third party is involved, it can be challenging to navigate changes if parties are nonaligned in their goals and approach. Since you are investing a lot of time and money to work with an ISV Partner, it’s essential to set realistic expectations by identifying your needs and communicating them early in your interactions with your potential ISV.

Moreover, in his 10 Steps to Digital Transformation and ERP Implementation Success video, ERP systems expert Eric Kimberling from Third Stage Consulting mentions the importance of the people side of a transformation and how it’s often overlooked but can make or break an ERP implementation. One of the crucial challenges is developing a clear strategy and plan to cover all aspects of your business.

With that being said, companies must think beyond a simple ERP implementation. We recommend working with a consultant or advisor like Third Stage Consulting to help you establish a clear digital transformation strategy so the ISV partner can effectively align your implementation goals with your business goals. Go through the checklist below to select the right partner for your business.

Are ISVs helpful?

ISVs push software applications beyond the original equipment manufacturer’s intent. Custom software can achieve tasks faster and more effectively while helping save time and resources.

What are the key benefits of using an ISV solution with your ERP?

ISV partnership programs can tailor to the specific needs of your business model. Instead of being limited by the ERP software publisher’s one-size-fits-all approach, an ISV allows you to customize your cloud or your virtual machines.

An ISV-provided software solution can push a system beyond what software and hardware manufacturers originally envisioned. Due to the customizability of ISV systems, they can be used to add industry-specific features for many types of businesses. Some examples include manufacturing, education, healthcare, energy exploration, distribution, and finance.

ISV applications can simplify the assignments of the different departments of a business. The same type of software used to improve HR systems can help with accounting and customer service. This way, a company can rapidly enhance operational efficiency and increase customer satisfaction.

The AI capabilities implemented into ISV apps offer built-in audit competencies and can track database changes. When the time for an audit comes, the software can produce a precise report for the auditor.

How much do ISVs cost?

ISV-certified software has a varied price range. The cost of acquiring an ISV software application depends on its intended purpose and the sophistication of its functionality. 

Not all ISV software publishers offer software solutions of equal technical requirements and caliber. Some independent software providers offer entry-level, bare-bones ISV software, while other software companies create powerful apps that can drive a company’s digital transformation.

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Choosing your ISV partner | 7 considerations for a strategic partnership

Each ISV offers its own set of technologies designed to meet the unique needs of businesses, ranging from cloud vs. on-premise products. Many companies are looking for hybrid and/or multi-cloud solutions to “embrace functionality such as data residency standards, enforcement and legislation, low latency, and low cost that improves mobility, and provides enhanced protection, enhanced user interface, and ubiquitous access’’. 

Blockchain, security, and API are some of the many additional features available today that you can explore to help your business operate more efficiently and transparently. Since there are many solutions to choose from, it’s vital to ensure that when selecting an ISV, their technology empowers your business to do what you want it to do inside your ERP, not just for today but for tomorrow and beyond.  

Introducing a new application to your system can come with uncertainty as it directly affects how you do business. The new solution needs to feel natural and intuitive for users so it doesn’t add a barrier to their day-to-day tasks. On the other hand, if the new solution feels like a completely different platform, it can negatively affect your staff’s workflow and slow down your processes. 

Ultimately, an ISV should give your staff the ability to manage data with more visibility and control in the ERP they work in daily. A simple way to determine whether a solution is right for you is by asking your stakeholders: Will it make your lives easier or harder? 

 

Your ISV might address the needs of today but should also address the needs of tomorrow. Jason McGee, VP, and IBM Fellow used The Weather Company as an example to describe the importance of responding to an increase in demand. He said: “When extreme weather like a hurricane hits, page views can spike 5x to 150 million views per day, along with 25 billion on-demand forecasts… and 40 billion API requests [to connect the forecast to other app services].” 

As you anticipate growth for your business, find a solution that can support increases in sales volume, so you don’t waste your investment and are forced to move to a new solution. If the answer is not scalable, the loss you could experience is financial and practical since looking to replace it can significantly disrupt the flow of your business. Instead, choose a technology that can adapt to you in times of change and will not leave you stranded. 

It is no surprise that you might face a new situation and need to adapt, whether an increase in customer demand or a change in business requirements. However, not all ISVs have the same capabilities, so you should establish your preferred approach.  

While speed and flexibility are essential in any successful ISV partnership, agile solutions allow you to adapt quickly to changing needs and make new features available to users. Customizing the solution can also help you meet specific business requirements and enable you to perform certain tasks more easily and accurately. There isn’t a single answer to what you should prioritize, but you can try to anticipate your greatest needs when selecting your ISV to make the most out of your partnership.  

Finding a reputable ISV is essential in lowering your investment risk and setting expectations for the type of collaboration you will experience. You can find out what customers say about an ISV through online reviews, ratings, and video testimonials, giving insights into their work and impact on the supply chain

In your search, pay particular attention to the following:  

  • What do their customers say about them?  
  • What have they accomplished?  
  • Whom have they worked with before?  
  • What have they contributed to your industry?  

Ultimately, your choice should reflect your trust in them to provide you with expert guidance, the ability to solve complex issues, and a great desire to collaborate with other stakeholders.  

The most common pricing models when working with ISVs are: 

  • Software as a Service (SaaS): A subscription-based model where you can access the software via the cloud through a license.  
  • Perpetual: In this model, customers pay a one-time fee and purchase the software with the option to pay annual maintenance fees.  
  • Time and Material: These are additional fees, including consulting hours, training, and any other support you might need from your ISV. 

Most customers prefer the SaaS model since they can use the software for the duration they want, giving them time to test out the technology and see the benefits without paying a lot upfront. As more companies are looking to expand their software ecosystem with new applications, The SaaS pricing model is critical in helping small to midsize companies grow. Over the long term, perpetual pricing could be financially advantageous. 

In a recent McKinsey survey of 1,000 B2B decision makers, lack of speed in interactions with their suppliers emerged as the number-one “pain point,” mentioned twice as often as price. ISVs partnerships can help businesses achieve their goals through excellent support and customer experience. Learn more about the support your ISV partner offers, especially as taking the proper steps in your digital transformation goals can be overwhelming to do on your own.  

For example, find out who in their team will answer your questions, their typical response times described in Service Level Agreements (SLA), and what resources they have online to help you troubleshoot. This step is as crucial as determining the technology you need because your team will want to know what to expect and establish trust with the selected ISV. After all, you are entering a partnership and need to see if they align with your values, communication methods, and overall objectives. 

ERP services

 

When selecting an ERP, ISVs meet your needs while optimizing your business. In this process, your part is to determine the weight of each consideration mentioned above to facilitate your organization’s decision-making. This commitment takes time and requires input from various stakeholders to ensure your supply chain operations run smoothly, both internally and externally.

Centralize control of your daily business activities and raise your organization’s productivity with Vantree’s ERP automation. Vantree’s innovative ERP solution can work with any ERP system capable of consuming transaction data, such as EDI or API. Thanks to automation, tasks like accounting, procurement, project management, risk management, compliance, and supply chain operations can be accomplished quickly and seamlessly. 

If you are a business currently doing EDI with your supply chain partners and plan to transition to a new ERP, please consider contacting us next time you evaluate an ISV specializing in EDI & API automation.  

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