value of an erp

1. How much time will it take?

Don’t underestimate the amount of time it will take to implement a new system and get your staff up to speed using it on a daily basis. By nature, ERPs can be complex to configure and customize to your business. 

Depending on the type or age of the system you select, it may offer lots of customization options or want you to handle your business in a narrowly defined way. In addition, some systems were originally designed for specific industries and fitting them to your own needs might not be as simple as you’d like.

As a result, you may find your team spending more time than expected discussing your current processes and how you want to (or need to) change them.

Your business operates the way it does now for various reasons, maybe not all of which you would do the same way if you were starting over. In a way, implementing an ERP is a way to “start over” and so it’s natural that some evaluation of current practices will occur. Handled well, this can be a real benefit to your business.

Make sure you understand the limitations or requirements of the system going in, and what happens if you decide you can’t or don’t want to change your processes to fit the system, rather than the other way around. Part of the value of selecting the right platform and vendor is that the vendor has likely dealt with businesses like yours before, and can make process recommendations along the way that you might not have considered or had to deal with yet. 

 

2. How much time does my staff have?

Another thing to consider is how much time you and your staff currently have to work through process changes, and how much time they will have down the road. Working through implementation with your vendor of choice, training time, and entering the data once you’re up and running all add up.

While there are low cost ERPs on the market, the adage you get what you pay for is sometimes very true. Low cost likely means more time on your side to “self-onboard” and figure out the system. You might not have access to expert advice, or wait a day or more for your support ticket to get processed. Low cost options often have lots of “upsell” hooks, so your total cost a year later could be higher than expected. 

Systems that have been on the market for decades may have lots of features, but also might be harder for your staff (especially younger / more mobile-oriented staff) to deal with on a daily basis. 

It’s common for some ERPs to require long term contracts or “maintenance plans” that can make the total cost of ownership less clear upfront. In addition, desktop or on-premise systems may require changes to your internal network in terms of hardware, wiring and security hardening, and product and operating system patches – all of which may require time from an internal IT department or from other vendors. 

On premise systems do provide benefits, such as potentially being usable even if internet access is not available. These days it’s probably rare for a business to be able to operate without internet access, however. On premise solutions can be at greater risk for damage from natural disasters or ransomware attacks.

Cloud-based systems can be susceptible to the kinds of broad internet outages that do sometimes happen, and take multiple services offline when they do. With the trend of technology as a whole towards everything being in the cloud, this will likely be more and more common, but also something that affects more companies and industries. Cloud-based technology does provide ways to mitigate these issues, and the trend is that this will continue.

 

3. What is the ongoing cost over the years?

It’s common for some ERPs to require long term contracts or “maintenance plans” that can make the total cost of ownership less clear upfront. In addition, desktop or on-premise systems may require changes to your internal network in terms of hardware, wiring and security hardening, and product and operating system patches – all of which may require time from an internal IT department or from other vendors. 

On premise systems do provide benefits, such as potentially being usable even if internet access is not available. These days it’s probably rare for a business to be able to operate without internet access, however. On premise solutions can be at greater risk for damage from natural disasters or ransomware attacks.

Cloud-based systems can be susceptible to the kinds of broad internet outages that do sometimes happen, and take multiple services offline when they do. With the trend of technology as a whole towards everything being in the cloud, this will likely be more and more common, but also something that affects more companies and industries. Cloud-based technology does provide ways to mitigate these issues, and the trend is that this will continue.