Steps to Minimize the Cost of your ERP Implementation Project
Posted on: November 16, 2016 | By: Craig Thompson | Microsoft Dynamics AX/365
At the start of any ERP implementation project, there are bound to be a lot of questions – a big one being how to get the most functionality for your budget. Upgrading to a new system should be exciting and cost effective. While these projects can be costly, they don’t have to be overwhelming enough to break the bank. Below are five of our favorite tips to help minimize the cost of your ERP implementation project.
Planning and Project Management
Because ERP projects are such a time and cost sensitive investment, it is crucial for organizations to implement a project management plan for their ERP software upgrade (like Microsoft Dynamics AX). The plan should work to establish major project milestones and delivery dates, set deadlines, and clearly indicate everyone in the organization's roles to ensure that deadlines are being met in a timely and effective manner. If your implementation team and ERP consultant/partner know their jobs you should be able to keep time and cost under control – two major pluses!
Know What You’re Getting Yourself Into
Finding an experienced and flexible ERP implementation partner is a crucial step in any ERP upgrade. Your partner is your best resource for finding a good software fit for your organization and will have enough experience to address any issues that may come up. If your business is built up of multiple different divisions, it may be smarter to go through a phased out implementation process rather than one huge rollout. Taking the time to talk to your partner about your organization’s needs, company culture and organizational structure ensures that your project runs effectively the first time through and doesn’t cause your enterprise more headache and training costs than needed.
Logan Consulting is built of many experienced Microsoft Dynamics consultants who are trained to customize your ERP upgrade to fit your businesses particular set of needs. Before every project, we provide customers with an ERP technology assessment to find the best product fit and implementation plan for your business. Two major keys for success. Don’t let your business get roped into the one size fits all mentality. Know what you’re getting yourself into in your implementation and save money in the long run.
Keep it Simple
Customizable ERP software packages like Dynamics AX are great options for businesses looking to make a switch however sometimes these customizations can be pricy and unnecessary. Keep communication open with your partner to ensure that they aren’t overstating capabilities and understating the need for customization just to seal the deal. A good partner works for their client, not getting the client to work for them. Customizations are great to have as an option when your organization outgrows its current state, however adding a bunch of fancy new features right off the bat can really hike up the price tag of your ERP project. Communicate your needs with your partner first to determine what your business really needs in this project before you start the implementation.
Calculate ROI Properly
Do you really need to invest in a brand new ERP system like Dynamics AX or could your current pain points be solved with customizations or minor upgrades? If you do need to upgrade to a new software, what will be your return on investment (ROI)? This is a big step that can be forgotten, to figure out what metrics to measure when determining the ROI of a new ERP system, read up on some of our past blog posts.
Negotiate Licensing Costs and Professional Service Rates
In regards to licensing software, be sure to only buy into what is required for your company’s needs. So that you aren’t driving up the cost of your ERP project without any real reason. In terms of professional service rates, Dynamics AX training is a must for any ERP implementation project – without this crucial step, the odds of your project reaping all of the potential benefits are very low. Training is essential for ensuring that you don’t have to put more money into your upgrade down the road because when employees are happy and know what they are doing, your company runs smoothly. That being said, there is room to save money on professional services without sacrificing quality. Negotiate future rates for customizations and upgrades up front to ensure you are receiving the lowest price without sacrificing quality.
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