The cost of ERP in India

Erp investment

Investing in Enterprise Resource Planning for your Business.

ERP- THE NEED OF THE HOUR!

 

It is January 2020 the onset of a new decade. With the changing times we all move forward and upgrade ourselves to the new. It is an affirmation that you are living your life and believe in growth as only dreams give birth to change. 

Like in many other fields, the global business processing is going through a renaissance where everyone speaks of automation and digitisation. An ERP streamlines daily business processing such as accounting, procurement, project management, risk management and compliance and supply chain operations. This system ties together a multitude of business activities and enables the flow of data between them.

We all know “Rome was not built in a day” and so can’t be for your business process digitisation. It involves a lot of research and strategies to make a major decision such as to choose your Enterprise Resource Planning solution provider. The most common factor that arises in our mind is the cost.

How much does it cost to implement ERP in India? 

For any business, budget and cost-effectiveness is the key to growth and success. Choosing a suitable ERP provider could make or break your organisation. The objective of this post is to guide you how to choose an ERP software that’s best fit for your budget and business type. Adopting an ERP solution is not an expense but a long time investment for your business. Investing in an ERP System is in most cases a one time decision and hence a little time spent in reviewing multiple software before making a choice is advisable.

Implementing ERP is NOT sky-high!

 

When implementing ERP solutions to expedite business transformation, the owner or the decision maker should have a clear insight of the needs of its business. If you are one of the entrepreneurs who have not yet created a checklist, it’s time you unwrap the implementation challenges that are unique to your business goals.

 

ERP solution providers like Expand ERP provide one to one consultation with customers who require in-depth knowledge regarding the software. We help businesses to understand the needs and customise the software completely according to the requirements. The authoritative members, project team members and stakeholders should be aware about the critical elements affecting an ERP implementation cost.

There are various elements that are to be considered for ERP implementation:

 

    1. Scalability: The cost of ERP increases with the number of users who will be using it in the company.Training costs of the users is also depending on the numbers.
    2. Licensing: Here, the choice is totally yours. It is not compulsory to invest in a software license outright.The ERP license can be paid by monthly subscription based model also. Depending on the budget and requirements,the ERP license may be temporary or perpetual. The maintenance agreement is charged as a percentage of the license.
    3. Totally customised: Every organisation is unique and ERP implementation requires a lot of alterations and transformations which should fit into the business structure. It is best to implement a totally customised software which caters to all your organization’s unique needs.
    4. Nature of Business: Depending on the type of business -small, mid-sized or large the ERP cost is determined. For micro/ small organisations the annual cost of ERP could be anything between 6000-10,000 INR, as it is mostly online and there is no investment cost involved. For mid-sized businesses (manufacturers and wholesalers), ERP implementation starts from Rs 1,20,000 a year. The large segment businesses need to consider a budget from Rs 5,00,000 onwards annually.

According to a report,only 23% of the companies implement vanilla ERP with zero customisations done.

  1. Cost of Infrastructure: According to the deployment option-(on-premise or on-cloud option) the cost of infrastructure is based. For the cloud-based option cost will be low as all data will be stored on cloud and no hardware needs to be purchased. Further, the cost will be lower as less IT technicians will be employed .
  2. Recurrent Cost: This varies from vendor to vendor as some solution providers charge less initially but increases the cost at renewal. On average the renewal cost of ERP is 10%-15% of the total software cost.There are always chances of upgradation charges which can vary from time to time.

SUPPORT IS THE KEY TO SUCCESS

Choosing the right ERP System for a business is not only a pricing decision. It is 80% about considering the after sales support and training abilities. Your vendor should provide training to new employees and also upgrade old ones. If you are a manufacturing business in India, Expand ERP has the advantage of Low pricing and Local support on Installation and training.

MONEY SAVED IS MONEY EARNED

Investing in an ERP for your manufacturing business can increase production efficiencies, reduces the time taken by the Customers to pay, avoids pilferage of Inventory and help you get the necessary data to make decisions quickly. Investing in the right software will increase your profitability and your ability to increase your production capacity phenomenally. With Expand ERP you can take your organisation to the next level even sooner than you imagine. If you want an accurate estimate for your project, be sure to accurately scope your project and account for some of the most overlooked costs. Our team members in Expand  can help you set realistic expectations that won’t scare executives nor get you fired for causing budget overruns.

What to keep in mind while scoping your business before ERP implementation?

 

  • Complications of your business: It is advisable to keep an unbiased analysis of how complex your business requirements are. Many businesses need an entire ERP software solution (human resource,supply-chain,inventory etc). Companies which have lesser complexities may require only point solutions such as CRM or Finance and Accounting.
  • Change managing activities: The focus should not remain in one direction but also on business process reengineering. Any change in your business process will add to your cost on ERP at a later stage.
  • Similar business overview: We recommend comparing and considering similar organisations ERP vendors and expenses and not set a benchmark to what a particular solution provider may have set for you.

 

The license fee and technician costs is just one side of the coin to view before implementation of ERP. You need to consider the broader aspects to ensure your software investment delivers value.

Some tips to control costs:

 

  1. Clear view and analysis of cost from vendor (ensure no hidden costs)
  2. Develop a project plan with detailed estimates
  3. Include change or unexpected costs
  4. Carefully strategies and wisely judge your vendor
  5. Prices can be negotiated

YOUR FRIEND IN NEED!

 

EXPAND ERP : FREEDOM PRICING

 

Expand Freedom Pricing has been created keeping your needs in mind. Our attractive pricing module gives absolute freedom to the fast growing manufacturers and exporters to take the decision of digital transition of their organisation with ease. 

    • Subscription based concept: Prices starting from INR 3300/- subscriber/month
      Freedom from all fringe costs.Subscription includes update,upgrade,service,remote support (phone support,ticket support,and screen share support), R&D and remote implementation.It also covers cloud service ,auto backup of data, data encryption all managed for you.

 

    • Concurrent User Advantage:
      Freedom of unlimited named user in multiple departments and amp; locations.All users in your organisation will have their own login credentials at no extra cost.

 

    • Freedom from Capex and Infrastructure investment so that you are at minimum risk exposure.Even for customisation it is billed only after customer satisfaction.

 

    • Freedom from any upfront cost.

 

  • Easy Pay- Freedom to choose from Annual (special pricing available) or quarterly subscription fee module on the first year.
  • Pay as you use Privilege: Freedom to pay as per your usage from the second year onwards.
  • Freedom to choose Implementation options (on-line/on-ground) and customisations as per your specific need and pay accordingly.

LIVE LIFE STRESS FREE!

 

Empower your organisation with Expand ERP and enjoy real-time visibility and complete control of your business. Grow your business to the next level with ease as our software does the hard work. With Expand ERP we guarantee you a complete stress free life. 

Please leave a comment below for any further enquiries or if this article has been of any value to you. To book a demo call…  (+91) 9007026542

ERP for Manufacturing Industry

erp for manufacturing industry

ERP – THE BEST WAY TO REDEFINE THE MANUFACTURING INDUSTRY!

KNOW HOW?

Way back in the olden days, business data and records were maintained in complex spreadsheets and files and voluminous folders. When businesses grew in scale, such antiquated systems also got obsolete. They were replaced by ERP systems which were more than just organising and scheduling modules for manufacturing enterprises. They combined the virtues of business planning and management, production scheduling, inventory control, customer relationship management and alignment of partners in the supply chain. The manufacturing sector is piled with competition and susceptible to an ever-changing market ecosystem. To remain at the top of the game, manufacturers need ERP systems that can be deployed and maintained off-site, are comprehensible, scalable, customizable, cost-effective and easy to use. Every industry has their own specific needs and processes. The ERP solution provider needs to understand the business well to define the scope of the software. Expand ERP has over 15 years of extensive R&D and market testing to make the solution robust and perfect, exactly for your specific business need.

According to an ERP Software Market Report published by Allied Market Research report, the global market is expected to garner $41.69 billion by 2020.

Still contemplating about adopting Cloud based ERP for your manufacturing industry?

Here’s why your manufacturing unit needs a modern ERP system:

From conception and design through to manufacturing and delivery, ERP is built to handle the complex needs of manufacturers that use engineering in the design and build of their products. ERP gives you complete visibility into your software processes to help integrate engineering activities, streamline operations, improve efficiencies, manage complexities and grow.

  1. Cost-effective:

    ERP software makes quality management easier. Quality of the product is assured with ERP, which reduces the number of finished goods that are discarded. You gain real-time business visibility with analytics and reporting. The predictive defect analysis made available with artificial intelligence provides deep, timely insights into all aspects of your business. This limits wastage, reduces cost and increases the profit margin for a manufacturer. As the old saying goes, money saved is money earned.
  2. Streamlines Processing:

    Manufacturing operations which otherwise seem complex and redundant, are automated by an ERP system and streamlined across departments. Users can navigate complex processes easily in less time. The result is improved efficiency and cost.
  3. Maintaining Accuracy in Inventory:

    An ERP solution can track your entire inventory in real-time, which makes every transaction and business activity extremely transparent. Shop floor advisors can cross check the quantity of each product. Having accurate inventory or stock list provides products and services that deliver immediate value to clients.
  4. Agility saves Time:

    ERP offers to extend productivity, security and access to information to mobile workers plus partners and customers, working anywhere, anytime on any device. Decision makers compare the system generated reports on regular intervals to analyze the varied market demands and capitalize on customers purchase trends.
  5. Profound Analytics:

    All the departments of a manufacturing business are unified and synchronized in a modern ERP solution. Consolidated reports can be generated using the same system resulting in accuracy in analysis and precise forecasting. For example, an Accountant who can readily access charts and reports can make decisions based on real values and figures.
  6. Optimize Supply chain:

    Fast growing businesses need strategies to boost productivity, improve quality and reduce costs. Supply chain management (SCM) in an ERP system smoothens the planning and execution of activities in the business. This monitors the supply of raw materials to meet the demands of the finished goods.

To Conclude:

Cloud ERP solution is a huge revolution in the manufacturing industry. Most business owners have either already implemented ERP or are in the process of implementing it. So why should you lag behind in this competitive market?

Upgrading to Expand ERP will give your business an added edge for optimum returns on investment. As a solution that is 100 % focused on the needs of manufacturers and distributors, Expand ERP functionality includes primary and alternate BOMS and routing, Material Resource Planning, Masters Production Scheduling, Shop floor execution, scheduling Workbench, Inventory and Warehouse Management and Quality assurance.

Focus on finding a solution that aids you to achieve these benefits. If you’re considering implementing a manufacturing ERP solution contact us to help you develop a digital strategy to meet your business needs.

Our cloud solution offers a comprehensive suite of application without the costly hardware requirements. With Expand ERP you are sure to reap all the benefits of a hosted cloud environment.

To Know More Book a Demo:

5 interesting facts to adopt Cloud ERP

5 interesting facts to adopt Cloud ERP

How to benefit from Cloud ERP?

“Water has memory”….and Cloud stores the memory.

Cloud! …sounds quirky?

Cloud is the data warehouse for multiple users over the internet, without directly managing or physically maintaining external servers. In technical terms, Cloud Computing is a network of remote servers hosted on the internet to store, manage and process data in place of a local server. The most commonly used cloud providers are Amazon Web Services and Microsoft Azure.

Most ambitious companies rely on ERP systems to help integrate and organize data that is spread across each of its independent departments. Traditional ERP solutions are often housed within a company’s own server infrastructure and require updating and servicing to stay updated. Cloud ERP, as the name suggests, is based in the cloud, like SaaS (Software as a Service.) Unlike traditional ERP software, Cloud-based ERP relies on the cloud rather than proprietary server infrastructure to help companies share information across departments. Cloud ERP software integrates some or all of the essential functions to run a business, e.g. accounting, inventory and order management, human resources, customer relationship management (CRM), etc. – into one complete ERP system.

Transiting from On-Premise to the Cloud

The term “moving to cloud” also refers to an organization moving from a traditional CAPEX model (own the dedicated hardware and depreciate it over a period of time) to the OPEX model (use a shared cloud infrastructure and pay as one uses it).

Patrons claim that cloud computing allows companies to avoid upfront infrastructure costs, and focus on projects that differentiate their businesses instead of on infrastructure.

The benefits of Cloud ERP are many. Essentially, an on-premise ERP system lives on company’s own servers and is customized according to its needs. It’s a system built for a single client and is typically maintained by the ERP vendor or partners with updates delivered maybe once or twice a year. On the contrary, public cloud ERP systems are standardized to meet the needs of a multitude of clients, though all the data are separated and secure, the application and intelligence layers are shared.

 5 BENEFITS of Cloud ERP :

  1. Cloud ERP is typically more affordable. It eliminates the expense of buying computer hardware and software. In cloud, there is no need to buy hardware.
  2. Updates are sent to everyone at once, which delivers a competitive advantage. You’re not left waiting around for a vendor to update your custom ERP system. This ensures vast amount of computing resources can be provisioned instantaneously.
  3. Thirdly, Scalability is a huge advantage as it is easy to scale up your cloud capacity as per the need of the hour.
  4. Accessibility of data anywhere with internet accessibility makes business process smarter and quicker.
  5. Security– with Cloud your data is stored in a centralized secure location which is encrypted in highly secured systems. Shifting to the cloud also often requires changes to a company’s internal workings — changes that often turn out to be enormously beneficial.

Looking for a secure and reliable Cloud-based ERP Solution?

Your search ends here.

With Expand ERP cloud-based solution, you are free to manage your business anywhere or on any device that is connected to the web. All cloud-based servers are protected with software and hardware firewalls, in addition to 2048 –bit SSL certificates for secure HTTPS transports. Seventy four percent of IT executives and CIO’s have cited cloud computing security as the top challenge preventing their adoption of the cloud services model. But with us your data security is our highest concern. Safety comes First. With our Sure Shield promise, we help you overcome such security threats with our 100% assurance of data security.


We at Expand ERP train your team and provide a robust ready FAQ for our software and 24×7 support.

Still not made the right move to Cloud?

Given the fundamental benefits of cloud computing to businesses, it is no wonder that it is revolutionizing the industry, and is expected to grow further in the coming years. Hence, 93% organizations now use cloud-based IT services, 90% businesses plan to increase their cloud spending. Cloud computing allows businesses to ensure efficient collaboration across business locations and departments and effective sharing of information across third parties and contractors.

Some commonly sought after queries before moving to
Cloud computing are:

  1. What is the reason for the high demand in Cloud adoption?
    Over the years, the cost effectiveness of Cloud ERP was the most attractive benefit for changing business processing. The monthly subscription based payment module added to the leverage along with the elimination of managing software applications and investments in servers and external hardware. Besides, it also enhanced responsiveness, agility and promptness to act resulting in growth of business. It enables the users to access real-time information from various aspects of the business and utilize the data to make better decisions.
  2. What are the considerations for choosing between On Premise and Cloud ERP?
    The need for the deployment of new technologies in business is on a high. How and when to be transitioned is personalized to cater to the needs of the business for the optimum returns on revenue. A growing trend among organizations with on premise ERP is to start their cloud journey by adding specific cloud products (such as eCommerce or analytics) as satellites or complements to their core systems. extend? How will they enable you to achieve your growth goals?

Scalability is another unique characteristics of cloud ERP software. Being scalable, ERP can handle various business tasks irrespective of the size of the organisation. Technological advancements can bring new features and tools to make the ERP system more scalable and robust. From the aspects of convenience and cost-effectiveness, periodic upgrades of the ERP software are way better than replacing existing ERP systems. You can readily integrate the latest features and improve performance by updating the ERP version. It also contributes to bringing automation and digitalization to the business.

3. Is my business suitable for Cloud ERP?
Predominantly, business owners are often wondering whether digital transmission is apt for their organization or not. All kinds of organizations of every type, size and industry can use the cloud for variety of uses, such as data backup, disaster management, email, virtual desktops, software development and testing and customer –facing web applications. For example, healthcare companies use the cloud to develop more customized treatments for patients. Financial services companies are using the cloud to power real-time fraud detection and prevention.
It is necessary to choose the right ERP vendor who empowers rather than restricts. The key considerations should be Do the ERP solutions fit your business? Are they easy to use, deploy, and No matter how or when you choose to move your ERP solutions to the cloud, partnering with a reliable ERP vendor is crucial to adapt in the digital world.

At EXPAND ERP, we understand how important choosing the right ERP cloud service provider is for you. Our model-driven Innovation Platform promptly and efficiently helps to integrate all your business operations. With over 15 years of extensive R&D and market testing our home grown Expand ERP effectively takes care of all your business process needs. Expand ERP is a comprehensive, scalable, customizable, cloud-based ERP solution for fast growing manufacturers and exporters. We are the direct developers and implementers of the software and there is no third-party involvement. Thus, we ensure complete peace of mind as your business starts a smooth and hassle-free digital transition journey with us. To know more about Expand ERP or to book a demo call

Get a Demo:

Picking the Right ERP Software for Export-Import Business

When it comes to taking a pick for the software for export-import business which is right for your business you may feel a bit overwhelmed. But when your ERP Software for Exports needs to have a specific functionality the task can quickly become a headache. Accounting, Inventory, Basic CRM functions are handled by almost all ERPs. But at the same time if still stick to manual procedures in other processes it wont help your business much. You need to consider not only the ERPs that provide a comprehensive functionality but also which ones can be tailored to suit your needs.
 
The Factors that need to be considered
 
If you consider the functions, there are a number of components which are important in an import-export management tool. Tasks like tracking costs, the ability to account for various currencies and customs processing done the automated way fall under their preview. Besides, the functionality you should also consider support, costs and the satisfaction of previous clients with the software tool.
 
In order to have your inventory costs accurate the software has to take into account landing costs. Such costs are inclusive of taxes, brokerage, freight and duty. Once you have detailed reports about the products cost you can then set an appropriate selling cost for individual products.
 
If you are operating on a global scale then you just have to deal with multiple currencies. This makes it easier to change your selling price according to cost fluctuations. The scope of human error in calculation is also removed. You just must have software for export-import business that keeps a track of what your customers owe you and in which currency and what do you owe them.
 
Automation of customs procedures saves loads of time which would otherwise have been spent in the manual organization, entry and updating all the relevant information.
 
Customer satisfaction too should figure prominently in your ERP checklist. Dont be afraid to ask people using the ERP in order to know its advantages and drawbacks. Let the ERP vendor get acquainted with your business and make a customized pitch. A vendor who understands the needs of your business, as well as the particular industry you operate in, will be in a better position to be of help to you.
 
Lastly, keep in mind the support factor. If you may need round the clock support does the ERP vendor offer that? Remember that large software companies outsource their support services while a startup will be able to provide a more customized support experience in-house.
 
To Sign Off

Before you hand over the check for your ERP make sure that the system is best suited for your business processes and industry relevant practices. Some vendors customize their products while others offer specialized modules out of the box. The latter is usually less expensive and chances are that the vendor to is experienced with the needs of your industry.

Is Using Free CRM Software Right For Your Business?

Is Using Free CRM Software Right For Your Business?

Customer Relationship administration is the most grounded and the most productive methodology in keeping up and making associations with clients. The vast majority of the associations have devoted world class apparatuses for keeping free CRM software into their working environment. Advancement of this kind of holding drives the business to new levels of achievement. 
When this individual and passionate linkage is assembled, it is simple for any association to distinguish the genuine needs of client and help them to serve them better. It is a conviction that progressively the refined techniques required in actualizing the client relationship administration, the more solid and productive is the business. A portion of the proficient apparatuses utilized as a part of the majority of the prestigious association are Batch Book, Salesforce, Buzz stream, Sugar CRM and so forth.
Taking a gander at some more extensive points of view given as underneath we can without much of a stretch decide why using a free CRM software is constantly vital for an association. 

A CRM framework comprises of an authentic perspective and examination of all the obtained or to be procured clients. These aides in decreased seeking and associating clients and to anticipate client needs adequately and increment business.

CRM contains every single piece of points of interest of a client, consequently it is simple for track a client likewise and can be utilized to figure out which client can be beneficial and which not.

In CRM framework, clients are gathered by perspectives as per the sort of business they do or as per physical area and are designated to various client supervisors regularly called as record directors. These aides in centering and focusing on every last client independently.

A CRM framework is not just used to manage the current clients but at the same time is helpful in getting new clients. The procedure first begins with distinguishing a client and keeping up all the relating points of interest into the CRM framework which is likewise called a ‘Chance of Business’. The Sales and Field delegates then have a go at getting business out of these clients by sophistically catching up with them and changing over them into a triumphant arrangement. This is effortlessly and proficiently done by a coordinated CRM framework.

Every one of the points of interest in free CRM software is kept brought together which is accessible at whatever time on fingertips. This decreases the procedure time and builds profitability.

4 Places To Use ERP Software for Exports

Small and medium businesses can be basically overseen by a solitary ERP Software for exports which make your Imports and Exports simple. To Supply the exceptionally focused request shipment surpasses as far as volumes of offers and benefits you ought to require an ERP Software.

  • Stock administration

You ought to require an ERP Software for exports to supplant manual power in stock administration Commonly, as an organization develops more information is created. More established frameworks may not be prepared to handle the uptick in data or clients getting to this information. In the event that your framework is hindered, then profitability of each workers is influenced. Without perceivability into deals gauging, purchasers will have a troublesom time recognizing what to buy and when. Keep current generation levels and creation prerequisites close by as opposed to utilizing a disconnected, non-coordinated framework.

This can lessen stockpiling additional materials and rather keep the right sums available. In the meantime, this will permit you to maintain a strategic distance from deficiencies by continually having exceptional stock of crude materials and segments. The System will consequently raise buy request if there is any lack of stock and includes quality checking.

  •  Shipment Details

Spreadsheet planning will mean somebody is going to invest a vast bit of energy accommodating worker plans with what is going on the shop floor. A coordinated planning application is urgent for expanding time spent working and appropriately using assets.

Because of this you can convey the merchandise at determined time and date immediately.Organizations need exact reports continuously. Those organizations without a solitary framework are as yet utilizing incoherent or obsolete modules to get reports and inquiries.You might invest hours of energy superfluously accepting reports and confirming information from different stages. ERP Software will give you a chance to track the request points of interest at whatever time and anyplace from your versatile itself. Because of this component your client can get forward data.

  •  Inventory network Management

Taking after generation administration, logistics and conveyance it is essential to deal with supply administration. Off base bill of material, directing definitions and point by point generation guidelines add to improving and scrapping of materials. Having an incorporated framework can avoid scrapping material and generation time. Further re-working can influence other planned operations or undertakings. Lessening revamp and scrapping will mean additional time dedicated to on-time satisfaction and transportation of your item. A coordinated ERP framework can improve things greatly in dealing with your consumer loyalty. It can likewise enhance general rates of correspondence inside your client administration offices.
  •  Exchange Online

ERP Software gives the clients a consistent web exchanging knowledge through its different helpful components, for example, spilling stock quotes, online instalment portals, portfolio tracker, broad exploration reports, online IPO, continuous measurements. The clients can discover all their significant record and exchanging points of interest online and settle on a more educated choice for productive exchanging. Because of this you can deal with your time emerging of the bank line. By making direct exchange you can decrease the commission cost.

FERRARIS, FIATS AND FORTUNE 500S

FERRARIS, FIATS AND FORTUNE 500S

Why we don’t buy Ferraris when all we need (and can afford) are Fiats ?

It makes little sense to buy a Ferrari when you need to trudge daily along bumpy, pothole-ridden roads. The average person does not need a Ferrari. The average person cannot afford a Ferrari. If by chance he does get a Ferrari, in all likelihood he will not be able to maintain the Ferrari.

Alas the average man and the Ferrari are not meant to be.

In the context of enterprise resource planning systems, big firms like SAP offer Ferraris expensive, fancy and completely unsuitable for the average SME. Oracle and SAP have single handedly caused catastrophes of biblical proportions for their clients. Nike and Hershey’s may have been able to survive apocalyptical losses of $100 million but an SME most certainly cannot.

A Fiat is more affordable. A Fiat is more suitable. Most importantly, the average man can maintain a Fiat in the long run. Once an ERP system is fully deployed, it stays in place for 10 to 12 years on average.

In India many firms use outdated IT systems in their offices to coordinate their business functions and resources. India is the hub for small and medium businesses and a cradle for start-ups. The majority of the country’s workforce is employed by small and medium enterprises – not the Fortune 500s. Business is set to boom and overtake China by the end of 2030. Despite the dynamic development, firms have failed to adopt more efficient and standard practices that results in them continue to lag behind.

The ERP solutions by the big firms in the ERP are too extensive, too complex and too confusing for SMEs. The processes, modules and programs designed are geared towards the requirements of large conglomerates and Fortune companies. For the system to be suitable for the average firm, considerable changes and customizations are required – which further drives up the cost of the ERP. It is akin to buying a Ferrari only to replace all its parts one by one and its engine with that of a Fiat’s. By all means, it is a poor decision at best and the catalyst for an absolute catastrophe at worst.

Many local IT and ERP providers are gaining ground as a results, because they build their solution specifically for small and medium enterprises at a fraction of the cost and with a much faster implementation cycle. Once you order for a luxury sports car and then proceed with the desired customizations it is already months past.

If you buy a Ferrari you can expect to wait a long time for it to finally be in your garage – with the necessary paperwork, regulatory compliances, formalities and customizations. If you buy a car from your local dealer, you can expect it in your garage within a week or two at most. Small and medium enterprises need a provider with local knowledge who can give adapted solutions. SMEs as a results are better off hiring Tier II and Tier III vendors who are based locally as they possess in-depth understanding about the relevant industry and business environment. The ERP systems that are provided by major IT firms are too extensive, and complex and do not have the flexibility to adapt their services to local conditions. Given that the large IT firms give standardized solutions throughout the country with their centralized support system, they lack the ability to adapt their service to very specific local needs of the SMEs. Partnering with Tier II firms who give local support service tends to be the wiser, better choice for SMEs.

It is essential that the modules in the ERP system are designed with the day to day processes and relevant industry specifics in mind. Vendors like ExpandERP provide business solutions specifically for SMEs and are specialized in export and manufacturing solutions. An SME thus has a solution that perfectly addresses their business needs with greater support at a fraction of the usual cost.

Tier II firms design sturdy affordable cars and have an extensive service support. Tier I firms prove state-of-the-art, customized luxury cars but at exorbitant rates and with limited support system. SMEs require a relatively sturdy, standard system that can handle the firm’s daily challenges and go over the bumps without breaking down. The tier II solution or the Fiat gives a smooth ride, good mileage without breaking the bank of the buyer. It is advisable to leave the Ferraris to the Fortune 500s and ride away in the Fiat and save the tears and headaches.

References:
https://www.cio.com/article/2429865/enterprise-resource-planning/10-famous-erp-disasters–dustups-and-disappointments.html

Contributor: Vidushi 

Custom Road to Failure

How heavy customization doom projects

Big firms such as Nike planned to go the whole nine yards ensuring that their ERP system would be absolutely custom fitted to their needs and desires. Sure, the additional modifications and

customisations would indeed add a few more thousands to their ever growing expenses, and the project may get delayed by a month or two, but in the end it would work out perfectly right? Wrong. The $400 million upgrade to the supply chain and ERP system resulted in the company losing $100 million in sales and their stocks crashed by 20% as a result of this fiasco.

The failure of the ERP system can wreak havoc for any company. Excessive ERP customization is often blamed for these disasters. ERP customization refers to the process of modifying the existing software and programs as per the requirements of the firm. Customizing the ERP program takes a lot of additional resources, time and financial investment –and it almost inevitably results in the project going way over budget and gives a system where the company has to rely on non-tested functionalities. A case in point would be the United States Navy who sunk over $ 1 billion in four different ERP projects that all resulted in failures.

The following are three main reasons why custom-made solutions end up causing more problems than ever before:

Increased Complexity and long term costs:

A company that demands heavy modifications to the system has to invest large upfront capital before they can reap the benefits of the ERP. Often time the changes are very narrowly focused and even minor deviations in business practices or related legal regulations render the entire system outdated. Once the firm has invested large capital in an on premise system, they are financially bound to a certain degree to continue using the system and upgrade the same solution for years to come. The ERP programs have to be individually customized each time the ERP system has to be updated to support the evolving industrial environment.

Upgrades to the system are continually delayed

ERP vendors periodically release new versions of their software and add new features and services. A customized ERP system is not able to mesh fully with the new version and data is often lost in the process. The firm is dependent on customization consultants to alter the customized codes each time that the system has to be updated – which adds a significant amount to the ongoing operational expenses. These additional expenses and problems are a hindrance when the firm decides to update heavily customized system. Companies tend to delay the upgrades to their system – sometimes indefinitely. This makes the company vulnerable as it is not able to adapt to the rapidly changing business environment and requirements.

Best practices are compromised

ERP vendors expend a significant amount on R&D to develop the best, standardized system that incorporate the industrial and legal requirements. Customisations to the system may result in the company failing to adhere to the industrial best practices and cause a lot of financial and legal woes.

If a company finds that it needs to customize the entire ERP system, it would generally indicate that the chosen solution is not the ideal one for them. Looking for an industry-specific ERP solution would help the firm in minimizing the amount of customisations required to make the system compatible with the business needs.

Companies need to understand beforehand that heavily customizing their ERP system greatly escalates the potential for disaster. The initial upfront investments required are exponentially greater and both the short and long term operational costs are significantly higher. The industrial best practices tend to be compromised in the long run and the consistent delays in updating the system leads to the firm becoming a dinosaur in the dynamic business world.

Contributor : Vidushi