Some background before we begin
Overlooked costs when implementing ERP systems
The Visual South team has over 25 years of experience with implementing ERP applications. We have basically seen it all when it comes to ERP implementations and come to recognize the characteristics of successful implementations, as well as the warning signs when an implementation is at risk. The good news is that the typical implementation goes as planned and is successful. But a common challenge that can derail the implementation process is a failure to identify hidden costs. Companies must have a plan to manage those hidden costs.
In our decades of experience, one of the highest hidden costs of ERP implementation is the extra internal time involved with an ERP implementation. And as they say, time is money.
Top categories of required internal time during ERP implementations
Successful ERP implementations require that current employees spend time doing activities that are additive to their normal day-to-day responsibilities in the current business system(s) that are being replaced. These additional activities are commonly overlooked or unplanned for, but the hours stack up and impact business operations…and therefore increase costs. Internal time that often goes unaccounted for during implementations includes:
A solution to avoid hidden costs in ERP implementation
So, how can you estimate this hidden cost during an ERP implementation? The Visual South team developed a matrix that allows our customers to define how many internal hours they think the project will require. The estimates are often quite revealing. The key benefit is that requests for extra internal resources are no longer a surprise. The matrix also calculates a reasonable time frame for implementation, based on what a company wants to do versus what a company is capable of doing, given their resources. This knowledge ensures that proper expectations are set and expectations are managed. Ultimately, our matrix reduces the possibility of a project running longer than expected, due to a lack of available internal resources, and improper expectations about how to accomplish ERP-associated project tasks correctly and on time.