Enterprise resource planning (ERP) software is designed to increase efficiency and reduce costs. However, when it comes to implementing or updating your ERP software, exceeding your budget is often a major and extremely common problem.
According to Panorama Consulting’s 2014 report, only 37% of ERP implementations were within the allocated budget and about one-third of implementations went over budget by 25%. What steps can your company take to get the best of both worlds – a new, more competent ERP software that meets the present and future needs of your business and a minimal time and financial investment which will yield a successful implementation? Follow these tips to ensure that your ERP software implementation stays on target.
There are so many options when it comes to looking at different ERP systems so be sure to do your research on which ERP software package is right for your business. This way, when it comes to making a decision, you’ll know which system will be the most suitable for your business and provide you with the best value for money. For example, selecting an integrated system like Pegasus Opera is flexible and can be tailored to better suit your business needs. Failing to conduct any research could result in choosing an ERP package that forces your business to work in an unfamiliar way and is unlikely to meet your business’ needs in the future.
- Create a Detailed Project Plan
When deciding on the ERP system to implement, make sure you have a project plan that specifies all important dates, task lists and the level of priority of each task to meet the proposed deadlines. Having a clear set of these objectives is crucial to keeping within budget. An implementation project is a back-and-forth engagement, if you are venturing into ERP software without the time needed to focus on it, you’re setting yourself up to exceed the budget and possibly fail in the overall aim. Without these crucial objectives your tasks will take longer than expected, resulting in higher costs.
- Maintenance and Support
ERP software maintenance can be expensive, especially when there is a problem which requires outside support. By getting ERP software maintenance included in the package, you are kept up-to-date with any software enhancements and bug fixes. This support means you have someone to contact to fix any issues you may come across. There are different levels of maintenance and support agreements available, so the project leader of the implementation will need to judge the potential level of support required. Not keeping your software up-to-date may be an upfront saving but may lead to future problems with efficiency and a large, costly solution. Matching the levels of ERP maintenance and support to the requirements of your business at the very beginning, will save you time and money.
- Limit Customisation
During implementation, it’s easy to want to create a more customised ERP package, but these changes alter the scope of your project and often add on significant time and cost. Try to avoid making your ERP system fit your old processes that your previous system provided – there is a reason your business is implementing a new ERP system. Often, it is because the business is in need of a more efficient and streamlined process.
Any small add-ons will accumulate, increasing the cost drastically, as Panorama Consulting writes in their ERP report “the projects went over budget, 17% of respondents indicated that project scope was expanded”.
You should also consider working with a provider who offers a fixed-fee implementation based on the scope of the project and offers weekly updates that include status reports outlining time spent on the project. This is another great way to stick to the allocated budget.
- Good Communication
Perhaps one of the most obvious tips – keep everyone up to date with what’s going on whilst allowing your employees to express any concerns they may have. Good communication between different departments will allow for productivity to be much improved and it will reduce the amount of duplication errors and rework problems, with the added bonus of saving money.
- The Right People and Training
Installing a new ERP software will involve commitment from different areas of your business. The right employees will require extensive training in order to completely understand the potential of what the software can do for the business. By training a select few from different departments, this allows the rest of the team to carry out daily tasks whilst the chosen employees receive that vital training. The process of training employees is costly and time consuming, so most companies choose to either stay with their current ERP software, which may do more harm than good or avoid the system all together, which results in lower productivity.
It is important that there is sufficient time allocated for your employees to learn the new systems, as expecting people to take on extra work in addition to daily tasks, increases the likelihood of taking shortcuts to meet all deadlines. Avoid unnecessary overtime and missed deadlines and make sure that you’ve carefully allocated enough time for your employees to receive the training they need. If the budget allows for it, some ERP implementation services will offer staff training as part of their service.
No matter the size of your company, if you’re implementing an ERP package for the first time or simply changing systems, these ERP projects are a huge investment in time and resources. Make sure to keep on track and keep those costs down right from the beginning, as this will provide a strong foundation and return on investment.