Over the years, ERP software has gained much momentum across all industries due to its compelling and customized features. It eliminates the need of incorporating a single software for every business dimension like SCM, project management or HRM etc. ERP deployment is a phase where it is used to operate organizational procedures.
Other than costs like license fees and maintenance fees, there is software implementation cost as well. Often, these costs run over the budget and become an issue for the business professionals. If you want to know what ways you can adopt to minimize ERP implementation cost, then keep on reading this document.
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Select the Appropriate Software
First and foremost, the acquisition of right software is essential. If you have selected the manufacturing ERP system for an educational institute then you will never be able to lessen the implementation costs. Your work will double up and it will be difficult to go through the implementation phase.
An ERP software which is not industry-specific can never provide the results you want. It will not be having the features and tools which fulfill organizational demands. So, using the right ERP software can make you lower the cost during the ERP implementation phase.
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Training Costs
Training costs are referred to as the hidden costs in the ERP implementation process even if you are using the best ERP software. You have to make your personnel an expert in handling the software. No doubt, it is a time-consuming and costly process as well. Since workers will take time in developing skills and this would add cost to the company for conducting training sessions. Now, what to do?
A comprehensive training session should be conducted where all the organizational members should be provided training materials and the necessary guidelines. These sessions should be informative and to the point. Try your level best to not go for training sessions again and again. For minor issues, take guidelines, but avoid conducting long sessions. Ask your vendor to not charge separately and highly for training, but include them in the support and maintenance package.
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Labor Costs
It is quite evident that employees are the ones who have to run and implement the software. Before ERP system implementation, they were doing the procedures manually and that’s why labor costs were high. Later, you can hire the proficient technical staff to reduce ERP implementation cost. Number of employees will be less; they wouldn’t require much training and productivity will be more.
Moreover, business needs to provide complete aid to employees and still work on their ambiguities. It will lead to operational efficiency and implementation would be easier. So, it concludes to going for skilled IT personnel with relevant experience.
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ERP Customization & Integration
It is one of the great merits of ERP that it offers customized features. It allows the end users to go for the mandatory required features. More than that, as per business requirements, you can also integrate other plugins to enhance software functionality. During the ERP implementation process, if you think you have difficulty in tracking employee timings and performance, then you can integrate it with the HRM module.
A discrete HRMS will cost you much, but thanks to ERP integration options which enables the users to make the most out of it. This advantage supports the overall business model and is also advisable to opt the customized ERP system. You don’t have to spend extra and manage another software separately. In this manner, not only your implementation process is facilitated but you get rid of other responsibilities as well.
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Effective Leadership
Change management is an important facet of organizational development. All the workers should be on the same page to implement ERP implementation. What normally happens is that employees not realizing the proper implementation of the system take a plunge back. Their output or performance doesn’t remain as per the standards. The transformation needed to be achieved by integrating an ERP software across the organization; depending on the investments internal stakeholders can make.
When people avoid the change or don’t put the required efforts, then the organizational system gets disturbed. They bear costs in terms of new hiring and extra resources. That’s where leaders have to play their part and motivate and guide the employees to the maximum level to evade their uncertainties.
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Maintenance Cost
After paying the software license fees, ERP vendors also charge maintenance fees. This is for the support that the vendor provides with time for extra guidance and software function enhancements. We can’t get away with software maintenance. Then what should be done?
Instead of having a software vendor involved to sort out the issues. It is better to select automated monitoring software to upgrade software’s performance. There will not only be a reduction in maintenance costs. So, whether it is ERP implementation or not, you will not have to pay extra maintenance costs.
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ROI Calculation
Companies may end up in paying more than the set budget if they overlook the ROI factor. You can minimize the costs in the implementation stage if you set your budget and calculate return on investment in ERP deployment beforehand. We agree that no software is perfect and to some extent, integrations are required.
The budget needs to be planned after setting aside some expenses for plugins and add-ons. Once, you will calculate ROI and what will be your achievements once you start using ERP software then you will spend accordingly. You will carefully analyze your spending and will work on minimizing implementation costs.
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Well-Defined Implementation Plan
Not following a plan in implementation can lead you to bear extra costs. Most good ERP business associates try to define a path and structured project procedure. They will make a plan of implementation and make a structure of each and every step. If it is so, then there are more chances that you will not spend extra costs on ERP implementation.
A project methodology decreases risk, prevents project fallouts, diminishes the time required for completing project stages, and makes monitoring and controlling of the project seamless. The project execution becomes more well-organized.
Final Say:
All these possible ways will make your journey easier in reducing ERP implementation costs.
