“The way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality: that is, waste neither time nor money, but make the best use of both.” ― Benjamin Franklin
This quote by our founding father is the principal issue in ERP purchase and implementation. Waste neither time nor money. Inefficient process can be solved with the right ERP system -- time no longer wasted. Of course, maintaining frugality in ERP purchasing is hardly easy. While the investment in ERP can be significant, there are ways to keep costs down and stay frugal.
Here are the top 4 considerations.
Research Options: Draft a budget; however do not default to the cheapest option. Consider the cost of each vendor’s solution along with the breadth of relevant functionality offered by each ERP solution. While operating in budget is essential, getting the right software saves in the long run, so balancing those priorities is key. At the same time, don’t let yourself be talked into a lot of different pieces and extras your company has no use for. The right vendor won’t up sell the unnecessary; they will instead help you think through scalability.
Choose a Vendor Wisely: Speaking of finding the right vendor, it is important to find one who can deliver everything your company needs, or may need, for the long term. Obviously, they need to offer the software package you want, but also make sure they are available long term for training and troubleshooting. Vendor support is crucial to implementation success and cost control.
Consider Licensing Options: There are many types of user options to consider and your vendor can help you choose what is both affordable and workable for your firm. Some options include named users, concurrent users, and even labels like “lite,” “occasional access” or “limited” can be applied to licensing options. The questions to ask include:
Factor in Savings: The cost of ERP vs. the cost of inefficiency is a serious consideration. The right ERP solution minimizes wasted employee time and wasted or duplicate data input. Data, in particular, is an often overlooked area for cost control. The data integration provided by ERP makes your company leaner, more competitive, more flexible, and more responsive to changing customer and business needs.
According to an Aberdeen Group study of job shops, those effectively implementing an ERP system report a 13-20% reduction in operating costs, a 10-18% reduction in administrative costs, and a 10-22% reduction in inventory costs.
There are lots of ways to control costs when replacing your ERP system and implementation cost savings also helps you stay within budget. Let Parallel Solutions help you balance business inefficiency and system cost. Call us for specifics on your company’s possible savings in ERP purchase and implementation at (440) 498-9920.
Mary Jo O'Neill