Six ways to reduce ERP implementation costs
Setting up a new ERP system is not cheap, but here are a few ways to reduce or eliminate ERP implementation costs.
Manage to your budget
Set a budget before beginning any work. What will your software cost? What hardware and network costs will you need to spend on? What consultants will be needed? How many hours of your own people will be needed? Will you need to use temporary staff to supplement the work your staff would have done while they are implementing? When will these costs be incurred?
If your estimates add to $500 but you only have $400, now is the time to cut out some work or find that extra money. Measure your actual costs and compare them to your budget frequently. Careful budgeting has been one of the best ways to control costs for many years - start with the basics.
Recommended reading: avoid unnecessary ERP implementation costs with our step-by-step guide to ERP implementation success.
Your sales people already want some customization and your engineers are clamoring for integration. Think carefully whether you really need to spend the money immediately. The ERP you chose is used by a wide variety of companies worldwide. The developers built in flexibility to work with many different processes. Learn how to use the out-of-the-box processes before any customization. You could find that it is better than the process you use now that required customization, and will lower your ERP implementation costs.
Only get what you need
ERP systems are packaged in several ways. Often they are sold by the module. If you need general ledger but have no need for accounts receivable, skip that one and save some money. Sometimes they will offer a package of the most common modules together. This can be a great money saver, but if they offer limited versions of some modules they might not have the tools you need.
Use the cloud
These days you don’t have to buy your ERP system at all. Cloud-based ERP systems require only a monthly usage fee, offering potential savings in servers and other infrastructure. Also, there are little to no up-front costs, which helps lower your overall ERP implementation costs.
Consider whether to work fast or take your time
There is a lot of work in setting up your ERP. Some find it is better to make a hard one-time push and get that work done and begin use of the system quickly. Others are happy to spread the work out over time, even years. It is possible to complete the ERP implementation with no outside help this way but you won’t begin seeing the advantages for a while. Think which approach fits your business - either one can reduce ERP implementation costs in the right setting.
Be sure you have executive support
Executive support is a requirement in general, but that support will save money too. When some (other) department is stalling or trying to add to the scope of the project, that executive can help them get back to the plan. The exec will also help with budgeting and analysis of how the project is coming to a completion.
These are only a sample of ideas to keep the cost of ERP implementation under control. The real return on your investment relies on the entire cost of ownership of your system.
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