Stay Within Your ERP Budget
Enterprise software is widely considered an essential asset for high-performing manufacturers and distributors. Without an ERP system, projects and data become siloed in different departments, and processes are more likely to incur errors and delays. However, several studies demonstrate that many ERP projects go over budget.
So what is a company to do? Why do budget overruns continue to plague ERP projects, and how do businesses 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.
Avoid Unnecessary Add-Ons
There’s a reason why we harp on the importance of prioritizing business processes on our blog. Companies tend to get caught up in all the different options out there to enhance their ERP software and lose sight of their business needs. Chances are, you don’t need every module available from a vendor or all the custom build-outs and dashboards your consultant can execute. Instead, focus on your most immediate requirements. Once you’ve rolled out your most critical ERP functionality, then you can start thinking about additional features.
The ability to modify your solution post go-live is one of the major advantages of cloud computing and scalable system architecture. Let’s take Epicor as an example. Businesses that need foundational ERP functionality can deploy an out-of-the-box Epicor instance in the cloud. Since Epicor’s package already includes an array of common modules, users gain a sophisticated system without undergoing a long, expensive project. Furthermore, with the system hosted in the cloud and powered by service-oriented architecture (SOA), businesses can take on customizations and integrations at a reasonable price.
Rather than pursue every available feature and modification, simplify your implementation by focusing on your most essential processes. This will help you avoid delays, errors and budget overrun.
Budget and Plan Thoroughly
Software projects are doomed to rack up costs or extend beyond the original scope without a thorough plan and budget. Companies often miss some of the critical components of ERP implementation when they’re building a project roadmap. What is your change management strategy? How will you transfer data and perform tests prior to the 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?
When questions like these are left unanswered in the early days of a project, the result is disorganization and expenses later down the line. Hammer down as many details as possible to avoid costly changes and confusion. Refer to this plan at every stage of your project to prevent executives and stakeholders from tacking on new and unnecessary tasks.
But let’s be realistic; there will still be some unforeseen circumstances that arise during your implementation. That’s why it’s important to leave some wiggle room in your budget and timeline. Additionally, put in place a strategy for consistent and frequent communication. When the original blueprint of your implementation requires some tweaking to account for a new issue, ensure this change is signed off on by stakeholders and communicated throughout the team. This will help you avoid disrupting other project activities or upsetting stakeholders when they start noticing unexplained costs and changes.
Focus on ROI
Ironically, it’s sometimes the most budget-conscious companies that wind up paying the highest price for their ERP implementation. Smaller firms are more inclined to hastily complete software projects and make rash decisions based solely on costs. When businesses cut corners, they often experience problems and miss out on greater ROI.
For example, you may choose a system with a low price tag only to find yourself signing big checks to add critical features and fix huge errors. Cheaper software often lacks the flexibility and comprehensive functionality of established vendors, such as Epicor. Forrester reported that Epicor provided 264 percent ROI by supporting lean manufacturing and increasing employee productivity. Epicor also offers one of the fastest payback periods of any vendor, according to Panorama. That’s why you should carefully select the ERP that will give you the most bang for your buck rather than rely solely on the initial cost.
Businesses also mistakenly forgo any customization. This may sound contradictory to our earlier point about customizations, but to reiterate, we advise against pursuing unnecessary add-ons. Truthfully, no software is one-size-fits-all, meaning that some modification might be essential to support critical processes. Don’t leave those out of your project just to cut out extra steps.
The riskiest move of all is undergoing ERP implementations without seeking consultants. Sure, consultants will up the initial price, but their expertise will ultimately help you achieve greater ROI. 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: ignoring best practices might help you lower upfront costs, but to maximize the value of your software and mitigate risk, build your project strategy around generating long-term ROI.
It’s time to reverse the trend of over-budget ERP implementations. When companies develop a realistic budget, plan their project in accordance to their unique needs and follow best practices, they can enjoy a new ERP instance without hiking 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 Epicor Platinum Partner with over 20 years of experience in providing ERP, CRM, eCommerce and integration solutions all over the world. From small start-ups to global enterprises, we know how to make your software solution fit with each client's unique business needs.
To get the most affordable, swift ERP implementation without sacrificing functionality, look no further than our Quick Start ERP implementation packages for manufacturers and distributors. With Quick Start, users gain powerful out-of-the-box Epicor modules and expert consultants who can provide a fast implementation at a low fixed price. It’s the best option for small to midsize businesses embarking on their first ERP installation.
Work with Datix to achieve an on-time, on-budget software implementation. Learn more about our comprehensive solutions and services by getting in touch with us today!