If you’ve been thinking about implementing ERP lately, then you’ll know that it’s a hefty investment. As such, it’s a decision that shouldn’t be taken lightly, especially when there are continuing costs to consider once you’ve gone live.
From support costs to the expense of training your team, the price of implementing ERP doesn’t simply stop once things are up and running. Proper planning will be required ahead of time to make sure you can predict, and mitigate, any ongoing costs associated with managing your ERP system.
To help you stay on top of that, we’ll run through the most important costs to be aware of once you have gone live with a new ERP software.
A post-go-live optimisation strategy is a formalised process wherein you learn how to extract maximum value from your new software. Working closely with your software vendor, this phase of the ERP implementation process is designed to ensure you get the most from your newly adopted system, whilst ensuring any teething problems are ironed out swiftly.
For Intact iQ users, post-go-live entails entering an Optimisation Phase – a period in which our experts aim to get you fully up to speed with your new software. It provides you with dedicated on-the-job training for your team along with hyper-care support for a 6 to 12-month period.
For many businesses, this phase of optimisation has proven invaluable. It ultimately lays the foundation for the success of their ERP infrastructure, helping them to refine their processes and extract maximum value from their investment.
And while optimisation is an additional cost you may not have envisaged before, it’s definitely something you should build into the costs post-go-live.
Once you’ve completed your optimisation phase, you now need to make sure your system can function as effectively as possible going forward. To do that requires ongoing support in the post-implementation phase.
If your vendor doesn’t offer an optimisation phase, we’d recommend that you should factor in increased resources for at least two months of post-go-live hyper-support, along with ongoing additional, heavy-use support/consultant costs for 12 months post-implementation. Beyond this, support will become a recurring annual cost that will ensure any issues you encounter are dealt with swiftly, along with ensuring your software is kept up to date.
Alongside your optimisation costs and support costs, a successful ERP project will also factor in upskilling your team so that they can fully understand and use the system to its fullest. Without training, you simply can’t expect employees to properly get up to speed.
However, since the cost of training can actually be a challenge to calculate, it’s something that a lot of companies overlook. Pre-go-live training is the basic requirement, the cost of which will be included in your initial investment. In our experience, businesses who also invest in on-the-job training (or an optimisation phase) when the system is live generate returns from their new ERP system much quicker.
There are a few things you can do to help make working out your training costs easier. Firstly, conducting a skill gap analysis lets you identify any areas which need developing and improving. A training needs analysis can also pinpoint business process owners and specific areas of training that your team will need.
Another effective means of getting people on board; an organisational change management plan can include communication and training plans to further streamline the ERP implementation. You might also enlist a change management specialist, either part- or full-time, to make the transition towards ERP much smoother. This is another cost you’ll need to factor in, but it’s one that can pay off in a big way in the long term.
It may even be the case that you lack the resource for your existing team to carry out the implementation as you’d envisioned. After all, they’ll have their own jobs to be attending to as well. If they’re stretched in the go-live phase, then you might need to hire other staff to cover their existing duties while they’re busy with post-implementation.
Of course, this depends on the budget and size of your business. A bigger company will likely have the resource to make new hires if necessary.
Software Change Costs
Your ERP software vendor will have worked with you to incorporate the features that will best serve your operations. However, with every business being different and change being a constant, there’s a strong chance you’ll need to make a few tweaks here and there.
Adding in extra features and modules that your original implementation configuration didn’t include is another cost you’ll have to contend with.
On top of implementing these new features, ensuring your team accommodate the fresh additions is another time and cost-intensive operation that you’ll need to be prepared for, if necessary.
To ease costs in this area, it’s a good idea to identify whether you will need any specific additional features or functionalities in the future and budget accordingly. These add-ons can vary greatly in their costs, so you may decide to implement them once you begin benefitting from the ERP system as is.
The same goes for any elements you may be unsatisfied with. If your ERP falls short in certain areas, it may be because something was missed in the planning stage. This will be a hidden cost in terms of time that you might not have accounted for in your initial budget.
That’s why it is so important to work with an ERP vendor that offers a comprehensive post-go-live service. Ensure that your ERP vendor provides you with a service that goes beyond technical support.
Do they offer ongoing access to training, consultancy, account management, customer forums, etc.? Remember an investment in ERP is designed to last 10-15 years but only if you are working with a vendor that is geared up to continually help you refine it for your ever-changing, scaling and diversifying business.
How can you decrease these ongoing ERP costs?
Although these continuous costs might seem like they’re set in stone, there are a few different things you can do to minimise them and make longer-term savings as a result. These include the following…
- Direct and indirect maintenance and support costs are scalable. Make sure you’re budgeting for potential growth, as these costs can easily expand over time. If you sign up to a certain support package on day 1, make sure you can scale it up or down pending business circumstances. Dedicate 100% commitment to your ERP implementation project. Many businesses rush this stage or don’t give it the time it deserves. This results in increased costs over the lifetime of the project as they seek to retrospectively address implementation tasks.
- Be realistic with customisation. It’s easy to get carried away with add-ons and extra features, especially when you have specific needs to cater to. With the cost of add-ons to factor in, it may be worth taking a “less is more” approach. You can also counter the cost of customisation by investing in an ERP solution like Intact iQ. It offers a high degree of codeless customisation capabilities that can be easily managed by your team, ensuring you can flex the system to your needs without having to always revert to the ERP vendor to make these changes. This will substantially reduce the total cost of ownership for your business.
- Negotiate lower service fees. With software always upgrading, you’ll need additional help from your vendors to take care of these developments for you. It’s vital that your agreed-on rates are something you can afford over time.
From big issues to small snags, Intact iQ provides you with a single solution for all your business needs. Tailored to the way you work, its sector-specific capabilities mean future-proof, next-level operations across your entire enterprise. For more information, head here, or get in touch with us today.