Implementing ERP? Here’s How You Can Reduce Costs
Staying competitive—quickening agility, creating efficiency, developing strategy, maintaining an environment of innovation—is dramatically changing the manufacturing and distribution landscape. Delivering products faster and more accurately than anyone else is what makes businesses stand out; that’s why enterprise resource planning (ERP) software is widely considered an essential asset for high-performing manufacturers and distributors.
ERP software is the key to solving pain points (data silos, production roadblocks, etc.) and pursuing business growth. That being said, studies demonstrate many ERP projects go over budget.
So how can you keep budget overruns from plaguing your ERP project? And how can you gain the critical functionality of a robust ERP system without facing exorbitant costs? We’ll get to the bottom of this conundrum and provide helpful tips to reduce your ERP implementation expenses below.
Thoroughly Plan and Budget
Without a detailed plan and budget in place, software projects are doomed to rack up costs or extend beyond the original project scope. Businesses often miss some of the critical components of ERP implementation when they’re building their project road map. Some of these critical components include:
- What is your change management strategy?
- How will you transfer data and perform tests prior to deployment?
- Will there be any network and hardware costs?
- Who will serve on the project team, and how will their usual job tasks be covered throughout the project?
This is by no means an exhaustive list; however, when questions like these are left unanswered in the early days of the project, the result is disorganization and excess expenses later down the line. We recommend nailing down as many details as possible in the beginning to avoid costly changes and confusion later.
However, it’s near impossible to predict everything during the planning stage of your implementation. That’s why we suggest leaving some ‘wiggle room’ in your budget and timeline. Develop a strategy for consistent and frequent communication, and have a plan in place for when the original roadmap requires some tweaking to account for new issues. This way changes won’t disrupt other aspects of the project or create more unaccounted expenses.
Perform Cost Comparisons
Just like any large business investment, selecting an ERP vendor requires extensive thought and consideration. By submitting an ERP request for proposals (RFP) to the vendors you are considering, you can compare each vendor’s functionality and cost. Plus, you can negotiate your contract with each vendor to get the price. By researching and doing your due diligence, you can keep the price of ERP as low as possible.
Avoid Unnecessary Add-Ons
We stress the importance of business process modeling because it’s not uncommon for businesses to lose focus when presented with the myriad of add-on modules available. Most likely, you don’t need every module available from a vendor or all the custom buildouts and dashboards your consultant can execute. Instead, we recommend focusing on your immediate requirements. Once you’ve rolled out your more critical ERP functions, then you can start thinking about additional features.
Rather than pursuing every available feature and modification, simplify your implementation by focusing on your more essential processes. That way, you can avoid delays, errors, and budget overruns.
Leverage Expertise from a Consultant
Finally, seeking an enterprise software consulting firm for your ERP implementation project can drastically help you reduce the price of your ERP implementation. Sure, consultants will up the initial price, but their expertise will ultimately help get the most out of your budget, while ensuring that top requirements are met. They know the solutions and best practices that will transform your business. Consultants will guide you throughout the lifetime of your software, from selection and implementation to ongoing maintenance and upgrades. Bottom line: consultants can help you implement best practices that minimize costs and maximize ROI.
It’s time to reverse the trend of over-budget ERP implementations. When companies develop a realistic budget, plan their project in accordance with their unique needs, and follow best practices, they can enjoy a new ERP instance without driving up the cost. But most importantly, these steps will provide them with a solution that develops substantial ROI and business improvements.
Get proper guidance throughout your ERP journey by teaming up with Datix. We’re an Infor partner with over 20 years of experience in providing ERP, CRM, eCommerce, and other exciting software solutions. From small start-ups to global enterprises, we know how to make your software solution fit with each client's unique business needs. Plus, we are with you for project consulting from start to finish!
Work with Datix to achieve an on-time, on-budget software implementation. Learn more about our comprehensive solutions and services by contacting us today!