Four ERP cost benefits to sell your project to c-level
Any time you engage in an internal ERP sales effort, you’d better have all your cost ducks in a row, or any effort is likely to fail before you get started.
Regardless of business press tendencies that tend toward buzz over reality, the hard truth is that cost management really drives management decision-making, since ‘hard cash’ costs will always outweigh values relating to suggested ‘downstream revenue.’
Over the years, I have experienced this condition many times - whether my role was as a trusted advisor, or as a senior executive - and it always ended up the same way. C-level folks simply love the idea of making money; but out-of-pocket costs? Forget it. Therefore, before you spend a lot of time on ‘how’ your new ERP platform will ‘make money’ for your company, first orient yourself to internal cost challenges, and how your ERP proposition will likely reduce them.
In that vein, here are four cost-oriented messages to help you burnish your apple a bit; while at the same time, saving yourself some stress in the process.
1. Enhanced cost efficiencies
This analysis is largely oriented to an investigation driven by better workforce production. Statistically-speaking employee failures at a production level tend to create more indirect cost than nearly any other business component. Consequently, if you spend some time drilling-down into this lack of efficiency, you’re likely to find some useful information that will support your sales case as it moves up the executive ladder.
2. More accurate budget forecasting
This metric-building effort actually relates to the potential of enhanced bottom line revenue, although indirectly. Instead, this effort should be driven by a streamlining exercise oriented to delivering empirical proof that your proposed ERP platform will produce more granular, and accurate budget projections than a legacy successor. Again, the better the numbers, the more confident management will feel.
3. Expanded cost/revenue reporting
Reports are the heart of any ERP value, and while this capability is typically expected within most resources-based platforms, some systems are more typical than others. Consequently, when looking for c-level support for an ERP sale premise, you should ensure that any new system offers the most granular cost/revenue reporting possible. If anything else this specific tip of the hat will be greatly appreciated by your company’s senior finance management, and which of course, is where CEOs and COOs go first for the capital validation of new system purchases.
4. Reduced ‘next-step’ opportunity costs
Finally, this investigation will support the future of your new system, with the goal being to establish a reduced cost of ownership argument. Again, bear in mind that mid-sized and large-scale company growth is on the basis of cash on hand, or at least being able to capitalize loan-based funding on the basis of empirically legitimate projections. Therefore, your ERP sales premise should accept, and embrace, similar thinking when you go hat in hand for the money necessary to mount your new ERP project.
As one might expect, the preceding list of considerations are nothing more than an indication of the necessary metric depth required to produce a greenlight for your ERP evolution. As the old saying goes ‘in the business capital game, more money is better, and the deeper the proposition the easier the acquisition’. If you simply use this axiom as a general guide and follow up accordingly, you should be just fine.
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