How to reduce ERP Implementation cost ?
An ERP(Enterprise Resource Planning) system is the most essential tool for any business to handle all its complex processes. When implemented properly, ERP can help you achieve significant growth, lower operating cost, better utilization of the resources and a streamlined business operations making path for greater enhancements. Such beneficial software should be necessary for all the industries but still some companies are hesitating for a change. This is due to many reasons and one of the major reasons would be implementation cost.
ERP implementation is a big process which includes a number of factors to be considered and when not planned properly it could result in a huge loss for the company. This fear can be overcome by sticking to the right strategy according to the business needs. Though the strategies could vary with industries, let us see some of the common tips and methods to focus on for a reduced implementation cost.
Proper Plan and Budget :
The first step for any change is to lay a proper plan and allocate the required budget. There are many questions to be raised before adapting to a new software. What is the cost of the software ? What is the strategy for change management ? How is data transfer going to happen ? How many employees are going to work on the tool and how much training schedule is needed ? Does the software require additional hardware to be bought and set up ? One should have answers for all these questions or else will end up in failure which leads to waste of money. Budget is another aspect the company should focus on. The money allocated is nothing but the investment for the future. Hence there should be a clear budgeting plan on where and how much you are going to spend your money on.
Select the right ERP software for your needs :
There are plenty of software tools available in the market and choosing the right one is so mandatory that it could cost too much if chosen irrelevant. As we all know each industry is unique in its operation and performs a defined set of processes. Similarly there are many ERP tools designed specifically for certain industries. Choosing an industry specific software tool will save you money when compared to buying a software with additional and advanced features which no longer is necessary to you. Hence research is to be done with appropriate software vendors before making the choice. This could greatly reduce the ERP implementation cost.
Avoid excessive customization :
Companies often seek to add additional features for future enhancements. But we should remember that customizing the software is not an easy task, it would require more time and investment. At the same time a repeated change would not be possible incase needed. Hence it is wiser to stick only to the exact requirements and not going for an excessive customization. The other disadvantage for customized software is that it might not get appropriate updates from the vendor side since the custom code needs to be changed whenever there is a new release.
Choose Software Vendors wisely :
Once the software has been selected it is equally important to choose the right vendor. The implementation process will require good training and post training support as well. Hence the company should be clear on the money spent is included for all those supports as well. Also the employee should completely rely upon them technically in getting the utmost support and knowledge sharing. This will help for the business growth as well. The major success of the implementation process lies with choosing the right vendor.
Look for ROI :
Before looking at change management it is mandatory to have a list of things you want to achieve in the long run. Many companies stick to a strategy that could only solve their current issues and allocate a budget accordingly. But this is not a safe measure to follow. One must have the forecast about their future achievements or the return of investments in detail and work towards them without compromising on the present.
Go for Cloud Software :
As we all have heard about the cloud revolution. The cloud platforms have seen tremendous growth and most companies are adapting to cloud tools for their business due to its number of benefits. The cloud software can be accessed from anywhere around the globe with the help of an internet browser. Hence the major need for a hardware desktop application kind of system has been majorly eliminated resulting in saving time and money of course. It is not necessary to allocate a bigger space for all those IT infrastructure to install software. The cloud tool comes with subscription and number of users based, hence you can save more instead of paying for each license. Thus choosing the cloud platform helps you reduce ERP implementation cost since it does not require any infrastructure.
The right implementation plan for your business :
The implementation process means transferring all those historical data of your company to the software’s master database. The historic data could be of any type like manual entries or excel sheets. Whatever form it has, it is the responsibility of the company to come up with a neat plan in transferring the data as the success rate majorly relies on this process. Hence a preplanned strategy is recommended before initiating the process.
Employee Training :
The last and another important area to focus on is employee training. The decision of implementing ERP software should not only be the organization’s decision but employees as well. Because it’s them who are going to work on those tools making a better business for tomorrow. Hence the employees should be given complete training about the software.
Wrap up :
There are so many ways to reduce the cost of ERP implementation. To say it in simple terms, a pre planned strategy will yield you the desired result. Many small businesses are still on the verge of choosing the right software. This confusion and myths should no longer be a barrier for business growth.