HighJump Software Guarantees Fixed Prices

  • Written By: Steve McVey
  • Published On: June 28 2001



HighJump Software Guarantees Fixed Prices
S. McVey - June 28, 2001

Event Summary

Every veteran CIO knows how implementation cost overruns can marginalize the projected benefits of a new system before it is even live. System upgrades can pose even greater risk and expense.

As any IT manager will attest, predicting the scope and cost of future upgrades is a task riddled with uncertainty. First, no one can reliably predict what the company's circumstances will be in the five years following an implementation. Will the company grow its business as expected into new product areas, industry segments, and geographic regions? Will outsourcing and hosting reduce expenses as anticipated? Will projected surpluses exist, and more importantly, will these be available for spending on IT improvements? Because no one has the answers to these questions (let alone knows what all the questions are), it is impossible to know exactly what upgrades will be needed or how much they will cost.

HighJump Software has launched a new program that seeks to alleviate some of the uncertainty. Its 'Change Insurance' policy guarantees an up-front fixed price for certain system upgrades that may occur within the first two years. Upgrade categories include maximizing worker productivity, facilitating collaboration with suppliers, enabling JIT and others that may be defined by the customer. To spark interest in the new insurance policy, HighJump is challenging prospective clients to compare the upgrade prices to those of its SCE competitors. As a marketing tactic, the fixed-price guarantee is a bold move that promises to raise some eyebrows, but whether competitors will play by HighJump's rules remains to be seen.

Market Impact

HighJump's fixed-price upgrades should attract a great deal of interest from users, but it is unlikely to spark a revolution in software pricing. The real aim of the program is to draw attention to the adaptability and flexibility of the HighJump architecture - something that HighJump feels is its greatest differentiator. Most vendors resist fixed pricing because upgrades typically carry unforeseen difficulties that arise after the vendor has committed to the price. HighJump's insurance is an internal vote of confidence in its ability to deliver upgrades and enhancements to customers with minimum development effort.

As for the challenge, few vendors are comfortable demonstrating business scenarios in a competitive selection process. It requires them to abandon canned presentations in favor of tailored demonstrations involving sample data sets, workflows, module integration, and in extreme cases, custom code. HighJump's challenge puts even greater pressure on rivals by essentially delivering select business scenarios for the prospective buyers to use as a basis for comparison. It is a little like allowing one student to write test questions that are then handed out to the rest of the class. Like the Change Insurance, the challenge should be viewed as an indication of HighJump's confidence in its product and not as a genuine call to arms.

User Recommendations

Supply chain execution system implementations are risky and expensive. HighJump's change insurance seeks to relieve some of these uncertainties and will offer peace of mind for some. As with any insurance policy, users should read the fine print carefully and understand the implications before signing up. In addition, the challenge invites competing software companies to meet HighJump in its arena on its terms but leaves details of conducting a selection to the user. Users should enlist the services of an independent, third-party selection consultant who can bring a sound methodology and deal with competing vendors on their behalf. Live software demonstrations and competitive price estimates are important parts of any competent selection.

 
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