How to reduce cost of setting up ERP systems?
ERP systems can provide multiple benefits to your business, including: better analytics to increase productivity, improved collaboration by managing data in a centralised location, simplified compliance, improved inventory management and production planning. Linkages to the whole of business and external software, such as other CRM or industry specific systems can build competitive advantage and provide invaluable oversight. ERP systems ultimately increase your profits and save your business money in the long run but their upfront costs can initially appear to be extraordinary. You may have been considering implementing an ERP system for a while but felt held back by the costs involved in setting up an ERP system.
This blog will help you realise where you can reduce costs to achieve a cost-effective ERP implementation and potentially change your view to seeing set-up costs as being an investment in the short to medium term.
Actively participate in preparing its inputs: clarify and cleanse data history
This is an area that can save you significant money and time while increasing the chance that your implementation is successful. Clarifying and cleansing your data history increases the chance that your ERP implementation will be successful and completed by the estimated go-live date.
It is important to realise that you cannot (and should not!) transfer all your data onto your new systems without expecting there to be a few problems that arise from corrupt or useless information. To streamline the process of transferring your data into your new system, you should ask your departments to analyse their data and remove any duplicate or out-of-date data e.g. expired product codes, operations, or ex-employees. You should be wary of any negative or missing values as this indicates there is an error that needs to be fixed before this can be imported into the new ERP system. It is also important that you find customers in your database who are missing email addresses, as this ultimately limits the functionality of your ERP system, as this relies on emails to communicate orders, receipts, statements and carry out CRM and marketing. It is also important to remove any duplicate customers and ensure that their details are in the correct fields.
To bring in all data, just to make most of it ‘inactive’ is a double-whammy on time and cost of set-up. It is important that you do not just wipe all of your data! This is critical information that can assist in forecasting your future performance. It is also important that you consider the regulations surrounding the storage time for your data. You will continue to use your old system until your new ERP system is ready to go-live. This means you need to keep your data clean. You may wish to consider limiting the user access to those who need it to complete their work. This ensures your hard work in cleaning your data pays off!
Remember that any time that you save, your ERP implementer also saves you money. Therefore it’s worth the investment!
Be clear on how you want customisations to look
Our number one tip to reduce costs is to consider what you need before considering customisations. This requires you to know exactly what you need from your system. Every business is unique so it is important that you have a list of the most important features that your business requires. Integrated Logic aims to minimise unnecessary customisation costs by recommending an off-the-shelf system that is configured already to suit the majority of your business processes and providing you with the functionality you need.
Remember customisation isn’t always a bad thing! Customisation in your ERP system can support and gives your business a competitive advantage that cannot be achieved with generic solutions. But over-customisation can be very expensive and has a number of other disadvantages. Over-customisation is expensive to build and maintain and is often has with increased risks associated with implementation, which takes time to deploy and requires a lot of testing. Over-customisation can require more expensive and complicated upgrades and maintenance. ERP systems usually last a decade and requires upgrades every few years. More expensive and complicated updates may be required if your system has a large amount of over-customisation. Over-customisation also increases the risk that your system becomes less intuitive for its users, as the best practices that have been developed within off-the-shelf ERP systems may be lost.
We are able to provide you with an ERP solution that aligns with your industry and process. You should provide us with your forms, reports and screenshots of how you want your business system to look to ensure we capture the essence of your business. Be open though to the possibility that a new report may not look the same as the trusty 10-year-old report, but may be more effective. It is also important to understand that code customisation is not the only way to customise your ERP system. We are experts across a number of products that could be integrated into your existing system.
Be upfront about all your current systems, integrations and connectivity
You may have discovered that you have outgrown your current software system and want to expand your business with a fully-fledged ERP system. Regardless of your reason you need to upgrade, your business can benefit from a system that can be fully integrated and customised.
It is critical that you talk to us about your existing systems and integrations that may have been thrown together over a very long time. This will allow us to understand how you run your business and determine which ERP solution is right for you. We need to know what limitations you have identified in your current systems to ensure these can be filled by your new system and any other specific requirements you may have. This will save you money, as we will be able to recommend a system that limits integrations or customisations you may require. We understand your business requirements change as your business grows. We believe your software should allow your system to thrive rather than just survive.
Think laterally – introducing a business intelligence Business Intelligence overlay to your new system may alleviate the need to bring historic data into your new core system.
We can help
We are experts in the set-up of ERP systems across a number of industries, including: hospitality, retail, professional services and manufacturing. We have checklists and control lists to ensure you and your team can be as active as you want to be in your ERP implementation. This results in a streamlined and cost-effective implementation.
We are experts across a number of ERP systems, including: MYOB Advanced, MYOB Exo and Ostendo. These systems are designed for growing businesses and can be tailored to suit your individual needs. Contact us today to find out how we can provide your business with a faster, better solution.
You may also find these blogs useful:
How much does an ERP system actually cost?
When should you upgrade to an ERP system?
Add value to your business with an ERP system
Phases of ERP Implementation