As we all know, ERP implementation is not a straight-forward project. There are many different aspects that need to be taken into consideration before jumping on board. Especially when it comes to costs, there may be some underlying areas that you haven’t thought of and were not added into your ERP budget. Instead of allowing these to pop up unexpectedly once you’re halfway through the ERP implementation project, plan ahead and be ready for them.
There are three main areas in which your ERP budget can unexpectedly take a turn for the worse. If considered before the project takes off, however, the shock will not be as harsh, and your ERP budget won’t take a hit. Make sure these three areas are already worked in before you get started.
Pulling the Thread
This is a budget failure that can typically be cut off before the ERP implementation has even begun. When the wrong ERP system is chosen and work has started to implement, problems arise and you’re struggling to tailor the program to your business needs. Unfortunately, when this happens, a money pit begins to form. The more you try to fit your business into the ERP system, instead of originally choosing the ERP system to fit your business, the thread continues to unravel.
From the beginning, choosing an ERP system that is right for your business is key. Take a look at your business and business needs before even considering which system to choose. Your ERP budget will thank you.
When calculating the costs of your implementation, make sure your ERP budget consists of everything. Even if you have gone over your business from top to bottom and thought you have considered everything, there’s a chance you forgot ‘soft costs’.
Soft costs include training time, time spent at work that is non-productive because of training, expanding your infrastructure to support the new Cloud-based solution and more. These are typical overlooked costs when it comes to ERP budget planning.
Running into one of these soft costs can hurt your ERP budget just as bad as the whopping numbers that come with purchasing a new ERP system.
The Budget Cushion
One of the most unfortunate ERP budget mistakes a company can make is not leaving a little cushion for unexpected costs. You may plan out the budget once, twice or even three times to be sure you have calculated for everything, between the actual costs of the ERP system to consulting. However, problems do arise without our prior knowledge.
Make sure to include in your ERP budget plan some wiggle room for unexpected costs. Whether it is having to spend an extra day or two in training or coming across a bug in the system, you’ll be ready. This will keep you and your ERP budget from going into shock.
When planning an ERP budget it’s best to consider every possible scenario before ending up as a typical “ERP implementation failure”. The best way to be sure you stay within your budget is to expect the unexpected, that way you’ll be sure to either hit the bulls-eye, or even come in under it.