Organizations across all industries are increasingly looking to the cloud as a way to help boost their productivity, revenues, returns on technology investments and customer satisfaction. It is important to realize that cloud enterprise resource planning (ERP) systems are not easier to implement or use than on-premise systems. However, when implemented properly, cloud ERP system software can save organizations a lot of money. These cost savings come in the form of reduced IT staffing and reduced hardware expenditures. In general, these are the two most common benefits that organizations refer to as reasons for switching to the cloud.
Before your organization decides to transition to the cloud, it is vital to consider the amount of effort required for the implementation. Again, Cloud ERP implementations are not easier than traditional ones. The most common problem is poor cost estimation and that is likely related to the lack of an appropriate framework for enterprise-wide prepackaged software maintenance, which of course requires an ongoing relationship with the software vendor. Moreover, you should keep in mind that all typical issues, such as organizational change management, adoption and use of new business processes, are always an obstacle, no matter what ERP solution you choose.
Therefore, whether you are implementing an on-premise or cloud-hosted ERP solution, operational improvement is achieved only through guidance from a highly experienced implementation partner, proper resource allocation and executive commitment. To realize cost savings from cloud ERP, organizations should also budget for all essential components, including everything from organizational change management to business process re-engineering(BPR).
Here are 3 tips for maximizing cost savings with cloud ERP software:
Know your Requirements – You should gather all the requirements and complete Business process mapping (BPM) before the implementation so that your organization can select the ERP solution that best fits your business.
Partner with the Right People –Cloud ERP software requires an IT Partner with unique skill sets. Look for a Vendor who has experience in your industry and has a number of references.
Understand the Costs – When evaluating ERP vendors, consider the total cost of ownership (TOC) and not just upfront costs. Remember that TOC is like an iceberg, which means a lot of the costs are usually hidden.
If you incorporate all of the above tips in your strategy, it will not only save money on upfront infrastructure costs but it will most definitely realize cost savings in IT staffing, licensing fees and annual maintenance. These fees only escalate the longer you wait, thus plan to engage in organization change management and business process re-engineering (BPR) early in the project.