ERP implementations can negate common hidden costs

1/4/2012 at 12:43 pm by The Sage ERP Team

Selecting, customizing and installing an enterprise resource planning suite of applications can be a frustrating affair when not properly executed. The most prevalent reason for this is likely the fact that costs are liable to spiral out of control. That's why ERP implementations require a great deal of care and attention. However, when done properly and with an eye toward hidden costs, it isn't particularly difficult to keep prices down.

Hardware upgrades
One of the more difficult causes of hidden costs is the fact that software vendors are not usually hardware vendors. They may have recommendations to make about certain machines and systems, and they may even provide the names of wholesalers or trusted dealers. However, their products are just processes that need to be run on wholly separate platforms. This isn't a very significant problem for companies that just want to enable the use of very basic business software, but customization and integration with other systems might require businesses to invest in completely new PCs. Consequently, it's important to understand at the outset that the use of enterprise resource planning software may end up mandating the purchase of new machines.

External consulting
Software vendors are tremendously useful resources that provide quite a lot of the data that a company might need to make their ERP systems fit their business model. However, there may come a time during planning stages that necessitate the need for outside help. This is especially the case when a particular industry is being used as the template for a suite of applications.External consultants can shed light on new practices that may need to be accounted for in ERP systems. They can do the same for government regulations that must be followed, helping staff members to create the appropriate amount of documentation to remain well within the bounds of the law. Be certain that this is outlined as a possibility well in advance of the later stages of an implementation.

Customization
There are many different levels of business software customization, so the earlier in the planning stages one is settled upon, the cheaper it will be to implement. Besides affording more time to developers and vendors to create the appropriate processes, this gives companies the chance to scale back their customization hopes and instead focus on altering their business models to suit what's available and affordable. Failing to do so can make an enterprise anxious that what money they've already committed to their ERP systems will be insufficient to produce anything remotely close in value to what their investments demand.