Costs to consider when thinking of implementing ERP – part 1 of 2

Elaine Havenga, Head of Marketing, Seidor Africa.

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Think ERP solutions are only for large enterprises? Think again. Many ERP customers are small and midsize companies using solutions that have been designed specifically with their needs in mind. That includes the initial project cost as well as maintenance fees, which are lower than those of solutions aimed at the enterprise market.

“Although priced for SMEs, this does not mean these solutions are lightweight in terms of functions and capabilities,” says Elaine Havenga, Head of Marketing, Seidor Africa. “They come with rich functionality and are able to support a business’s accounting and financials; sales and customer relationship management; purchasing and operations; inventory and distribution and reporting requirements. Importantly, they enable a business to gain efficiency and cut costs simultaneously.”

Havenga adds that remote project implementation is also a cost-saving factor. “Off-site consultancy for ERP project implementations and remote delivery are often the preferred approach when dealing with multi-site implementations. They can also be completed in just a few weeks, saving time as well as money.”

She says it is a myth that ERP solutions for the SME market are not customisable or scalable. They can grow with the business, and contain multiple modules, covering the needs of all departments in one solution. Many also have the ability to integrate third-party applications and data.

Key cost areas to consider when deciding on an ERP solution:

• User numbers: The number of users is one of the biggest cost factors to consider. It is important to check this cost and to also bear the licence fee in mind. Some solutions will come at a lower cost per user but have a higher licence fee.
• Architecture: Because each ERP implementation has to take the specific need of the business into account, look for a system that is designed with flexibility and priced for a growing organisation. Ensuring the system has the ability to integrate into any systems you might need in the future eliminates future complications and costs.
• In-house vs third-party implementation: For any business seeking to contain costs, it makes sense to use a third- party with experience in ERP implementations, integrations and processes. This is especially true for more complex organisations. The last thing any business needs is inconsistencies in integrations which will come at a great cost to resolve.

Business cost-savings to look forward to

Havenga adds that ERP costs are offset in large part by the resultant cost-savings:

• Expanded business and customer base: Customer-centricity is key to business success. With opportunity management, web-based CRM and e-commerce capabilities, a complete customer view across sales, distribution and financials can help the business uncover new ways to serve customers faster and better.
• Proactive control: A business that has automatic alerts, workflows, and can respond quickly to key business events and customer needs moves out of the reactive, time-consuming “fire drills”.
• Streamlined operations: Seamless integration of key business processes such as sales, purchasing, inventory and financials together eliminates redundant data entries and errors.
• Adaptation to changing needs: With easy-to-use customisation tools, the business can tailor its ERP solution to fit specific business needs and individual user preferences.
• Rapid ROI: This is where ERP cost-saving benefits really come to the fore. The best ERP solutions are quick to implement and increase productivity and control for enhanced profitability.
• Best practice industry solutions: ERP solutions for SMEs can give smaller business the same depth of functionality enjoyed by their much larger competitors.

“Many of our clients have reported that SAP Business One enables them to run their business 20% more efficiently, which ultimately leads to greater profitability,” says Havenga. “Imagine having all the tools needed to manage any area of business. This extends business capabilities beyond the core management function, enabling managers to streamline business processes and deliver value to all.”