What are the advantages and disadvantages to using a thirdpa

What are the advantages and disadvantages to using a third-party vendor like Olas to deploy a new ERP system? What steps can companies take to overcome disadvantages of relying on third-party vendors when deploying enterprise-wide systems?

Solution

Advantages:

Third party support for ERP system is a growing trend that makes sense for some companies.

Rather than getting support from vendors, a few companies rely on third-party companies to handle their support needs. Typically these companies provide application releases, technical support, bug fixes and patches for their clients\' ERP systems. Usually third party companies offer a variety of services from help desk to on-site teams, depending on the nature of the contract and the problem. This is usually cheaper up to half the cost of the vendor\'s support and can have other advantages as well.

The cost advantage comes from the fact that ERP vendors treat support as a major profit center and charge accordingly. Third parties typically charge less, and sometimes much less, for support services.

With a good third party vendor the level of support is the equivalent to what you get from the ERP vendor. However this is something you have to establish when choosing a third party vendor.

In choosing a third-party vendor, it is important to get a partner who has experience with your version of your ERP system and the size to support you as well. Due diligence is especially important in choosing a third-party vendor.

Disadvantages:

Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party

Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner

Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat