Home > Business Model, OpenERP v6.0, Uncategorized > OpenERP Partners – Getting revenues from existing customers

OpenERP Partners – Getting revenues from existing customers

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Well, just wanted to share I reply I posted in the OpenERP forum. This discussion was started by Fabien Pinckaers and it is an interesting one. It is how to get more revenue from existing customers. You can also read the presentation “OpenERP Partners – Getting revenues from existing customers”. I found the discussion quite interesting and I wanted to share my reply (which is below).

Just found this discussion and I wanted to share my thoughts on this. First, I would like to make clear where I stand now. My partners and I are starting a new software company and right now we are in the stage of being incorporated. We will be a formal company in one or two months. We are not OpenERP partners yet for the reason of not being a company yet (you could think of us as a bunch of software developers working together). We intend to become partners when we are incorporated as a company.

Why are we thinking of becoming partners? Basically because we intend to use the OpenERP software and we understand good software does not happen in a vacuum and people who develop it should be encouraged to continue its development. We intend to make money of OpenERP so we will devote a percentage of our income to its founding (we had a discussion with our partners on whether to become partners or donate a percentage of the money we make in each implementation, but we are leaning towards being partners)

OK, this is what I wanted to share. The best way to make money with OpenERP is with existing customers. From time to time we will make more money with new implementations, but on the long run we will make more money with an existing customer base. Plus, they allow you build a sustainable business.

What is the best way to increase this incremental revenue? Find new ways of either reducing costs or boosting sales. OpenERP (IMHO) is not about a technical proposition but a business proposition, which will allow business reduce its expenses or increase its revenues. How will this software do that? By understanding the customer business and its competitive environment. There is no secret to this. By understanding how the client makes or saves money, we will be able to propose new functionalities or projects that will allow us more money with the customer.

For example, we have a client who will soon implement OpenERP. Why is this client thinking of OpenERP? Because if it is well implemented it will reduce the stock, and the customer is thinking of reducing its stock in millions (OK, pesos, but still millions!!!). What the client needs is to reduce the expenses associated with inventory. The customer is thinking of implementing the stock, mrp and purchase modules.

But after implementing those modules, the customer will need to improve its forecast system. Why? Because the first step in inventory optimization is having a good forecast. And we will need to develop a forecast module for forecasting the demand of thousands of products. That will be a profitable second project (and we will be glad to share that module with the community). And after the forecast improvement module, we will need to implement the CRM module.

That is a good example of how aligning the OpenERP implementation with the business initiatives or business needs boosts the partner revenues. Our customer is not the people in IT (in two of our customers the IT department is only one guy doing whatever it takes to keep the computers and servers running). It’s the people in production, accounting, sales and marketing. It is understanding how to increase sales for the customer, or reduce its costs. Understanding this makes the OpenERP an easier sell (not easy, but much easier). And alleviates the pressure on the team.

A last thought, I think understanding the customer business will create the need for additional modules or applications. Such as Activity Based Costing module, Markdown management module, Revenue management module and so on. I think implementing these modules will generate very  interesting revenue opportunities for partners as well.

Well, just wanted to share my thoughts. Have a great Sunday!

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