Don’t Get Caught Out With The Hidden Costs Of ERP

Effective enterprise resource planning (ERP) can make all the difference to your business or organization with the integration of internal and external management information. By facilitating the flow of information throughout your organization ERP allows you to maximize efficiency across departments and identify key areas for improvement producing real cost savings.

Choosing the right ERP software and implementing this effectively are two of the most important aspects of successful ERP. However, with an ever-increasing range of ERP products in the market it’s easy to get caught up in deciding which software to use and lose track of the hidden costs you may end up incurring. Here are some key questions any organization should ask itself before purchasing ERP software:

How much training will be required to implement the software?

Employee training is essential for the successful implementation of any ERP software. Without it your employees won’t be able to take full advantage of the new systems and may even feel uncomfortable using them at all, reverting back to less efficient strategies instead. Be sure to factor in the costs of training both in terms of bringing in external trainers and time taken out of your employees’ regular work schedules.

How much will data conversion cost?

One of the key benefits of ERP is the greater efficiency it provides throughout your business. However, in order to enjoy this feature of your new software remember that a certain amount of data migration and conversion will inevitably be involved. As long as the long-term benefits outweigh the shorter-term costs of conversion ERP may still turn out to be a good option but remember to bear this cost in mind when selecting.

How much disruption will ERP implementation cause?

Once again, the costs of short-term overall disruption to your business, including data migration and employee training, during the implementation of a new ERP system may be well worth it once you’ve got the right system up and running. It’s important to consider how long your old systems may be down during the initial stages, however and include this in any costings associated with purchasing the software.

Will there be any additional customizations or adaptations?

To get the most out of any ERP software it is essential that you are able to customize the functions to suit your business. Make sure you bear in mind any additional customizations that may be required once you’ve purchased the software and factor in the costs of these. Similarly, if there are likely to be adaptations required within your organization to accommodate the software in the most efficient manner, be aware that these can cost both time and revenue.

Once you’ve taken all these potential hidden costs of ERP into account, you can be confident that you are making the right decision when purchasing your ERP software.

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