How To Prepare a Budget Before Investing in ERP For Your Business?

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This article was published on: 21/02/20 11:20 AM

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How To Prepare a Budget Before Investing in ERP For Your Business?

ERP- The inevitable need of the hour!

 

It is 2020 the onset of a new decade. With the emerging digital era all business organisations are compelled to adapt to new technological nuances. Like 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.

ERP can only work if it matches the unique requirement of your business.It is not about how efficient an ERP is . It is essentially how the ERP suits your business. If it doesn’t fit,it is sure to fail.

Implementing ERP- an investment for your dream

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.
  5. 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 .
  6. 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.

The cost of ERP will include most of these elements(according to your needs)

  • License fees
  • User numbers
  • Training
  • Features and modules
  • Customization
  • App integrations
  • Data migrations
  • Training
  • Testing
  • Maintenance plans
  • Upgrades

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.Further,the software is intuitive and highly user-friendly and makes understanding easy for all.

TIME IS MONEY!

MONEY SAVED IS MONEY EARNED

Investing in an ERP for your export and retail business can increase production efficiencies, reduces the time taken by the customers to pay, avoids pilferage of Inventory and helps 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?

  • First elect a team leader and build a team with decision taking authority and 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  knowledge.
  • A requirement list that includes features, integrations,users ,cloud or on premise , needs to be created.
  • 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 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.request for case studies for better analysis.

 

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 strategise and wisely judge your vendor
  5. Prices can be negotiated

YOUR FRIEND IN NEED!

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… +919007026542

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