Is everything in your budget?
When companies are looking for a new ERP or reimplementing a system, they start with a budget. That budget typically includes standard implementation costs and estimates on service hours from vendors. But those vendor quotes are almost never inclusive of everything. While not hidden, these unexpected costs can be high enough that the budget is at risk.
To help set a realistic budget, here are some examples of items that will not always be in the ERP quote:
Implementing -premises ERP requires having to update or purchase new servers. This is a cost that can make or break a budget if not properly planned for. Servers can cost anywhere from $5,000 up to $30,000 (or higher), depending on the space and licensing needs. Even if hosting is outsourced to a third party, such as Microsoft or AWS, it can be pricey.
Tracking time on work orders or moving inventory from location to location is a function many companies need in a new ERP. Barcode scanners, tablets, and phones are another hardware cost to be aware of. Depending on the device, the price can range from $500 to $3,000 each.
Other hardware costs to consider are upgrading Wi-Fi routers and PCs. Again, this cost can vary depending on the size of your company.
Creating a project management team for the ERP selection and implementation with internal people is a great best practice. When creating that team, keep in mind these “soft” costs:
- The people on the team will have two jobs until the implementation is complete. Their time on the project will take them away from their normal daily responsibilities. Every company handles this differently, but having a plan is key to success. Selecting the right people for these roles can either make or break your implementation. Keep in mind their current workload and upcoming projects when choosing this person. Their time focusing on implementing could cause overtime costs. Some companies consider adding overhead to cover the time of the project team’s daily duties.
- Another cost that can hurt an implementation is scope creep. Scope Creep is almost always caused by someone who did not follow the right channels for approval.
- When going through an implementation, a best practice to is have written documentation of your company’s process and workflows. If this is not currently in place, we recommend assigning someone to start doing so, as this plays a big role in the implementation process.
- Not having the buying of everyone can cause retraining, and delays in the overall implementation process.
Related: Common Structures of an ERP Team
We ensure success
Visual South has a detailed methodology regarding our implementation strategy and costs. Our goal as an ERP implementation partner is to sit on the same side of the table as our customer to recognize their needs. Understanding the costs ahead of the selection process will help to ensure a more successful implementation.
If you are looking for ERP and not sure where to start or how to budget, how about talking to an expert who is not a salesperson? Click here to learn more about Jack Shannon, and sign up for a free phone consultation to discuss your situation.