While you want to ensure measurable ERP business benefits, you don’t have to stretch your company financially thin to do so.
There are many ways to minimize ERP costs. While we don’t recommend trying to implement ERP with the smallest possible budget, it’s still important to be cost-efficient.
Whether you’re a small business or you’re simply strapped for cash during these difficult economic times, here are some tips for stretching your ERP budget:
5 Tips for Minimizing ERP Costs
1. Start Small
During ERP selection, it’s easy to get starry-eyed over the many bells and whistles available. In addition, you may even be considering a few software customizations to make the solution fit your business needs. While these may be beneficial initiatives, it goes without saying that there’s a cost involved in pursuing them.
To save money, consider only implementing the functionality you currently need or anticipate needing in the foreseeable future. This gives you a chance to use the system for a while and determine if you really need to implement all the functionality at once. If the answer is “yes,” you can budget accordingly and plan for the additional investment.
The 2022 ERP Report
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
2. Perform a Cost Comparison
ERP software is similar to any other major business investment in that it requires careful thought and consideration. Rather than pursuing the first vendor and solution that you come across, it pays to do your due diligence.
3. Maximize ERP Consultant Expertise
Do you plan to hire an ERP consultant to help manage your ERP implementation? To get the most benefit from your investment, it’s important to use the consultant’s time wisely. Ultimately, you want to ensure you’re maximizing every second of support that they offer.
One way to make the most of ERP consultants is to rely on them for not only technical expertise but also business expertise. This might mean asking for assistance with success factors, such as business process reengineering or organizational change management.
Another tip for making the most of ERP consultants is to ensure your project team focuses on pre-implementation planning and building strong organizational alignment. In other words, before engaging consultants for implementation, it’s important to make certain business decisions in advance, so you’re not deliberating about minutiae like workflow configurations while the clock is ticking on your contract.
4. Utilize the ERP System’s Best Practices
As mentioned, ERP software customizations can be costly and may not be mission critical. To avoid running over budget, try to keep any such adjustments to a minimum.
Instead, learn as much as you can about the ERP system’s best practices that are already built into the platform. Many solutions, such as ERP for small business, are designed to help certain industries perform routine business activities. In many cases, you will find that these functions are enough to support your business requirements.
5. Focus on Minimizing Long-term Costs
In your quest to complete an ERP project that’s as budget friendly as possible, resist the urge to go with the cheapest system around. While this solution might be ideal for your company, it’s still best to do your research and understand the other available options.
What would happen if you knowingly selected an ERP system that didn’t include the full breadth of features your company needed? While you might save money in the short-term, cutting corners in this way can mean facing even more expenses in the future.
This also applies to the way you approach the comprehensive ERP project. Sure, you could just implement a solution and force employees to adopt it, but it’s unlikely to reach its full potential.
Instead, we recommend focusing on organizational change management. This involves employee communication, system training, process training, resistance management and more.
Change management is a short-term cost that can reduce your long-term costs. When your workforce is empowered and on-board with the change, you can maximize ERP business benefits. Otherwise, you’ll spend time and money working through roadblocks while your system sits unused.
Keeping a long-term perspective can help you know where to save and where to spend.
Learn More About Minimizing ERP Costs
Deciding to pursue an ERP implementation is a major step in the right direction for most companies. This platform can help streamline and centralize your core business functions. In turn, it’s easier to oversee every aspect of your operations.
Yet, for many businesses, the costs associated with these systems can be prohibitive. So, what’s the answer? The answer is minimizing ERP costs by implementing only the most essential functionality and never sacrificing success factors that have lower short-term costs than the long-term cost of forgoing them.
Panorama’s ERP consultants can help you select a system and design an implementation plan that fits your budget and your goals. Contact us below for a free consultation.