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Controlling the Cost of Your Manufacturing ERP Project


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Taking a Proactive Approach

If you are in the planning or initial stages of selecting and implementing an ERP solution for your manufacturing business, you’ve stumbled upon this post at the very best time. Dissatisfied owners of ERP solutions most often complain about two things:  cost overruns and lack of user adoption. These are problems that can be solved if they are addressed before the implementation begins. Success depends on your taking a proactive approach.

Without careful planning, Manufacturing ERP project costs can begin to rise. Even before you have anything to show for your efforts. The challenge is to find ways to curtail add-on costs. And find them before the process moves on to a point of no return. Taking the time to plan and scope your projects up front can yield significant benefits for your bottom line.

Make a plan

Even before you purchase ERP software, your organization’s manufacturing ERP team must have a clear picture of what it is you hope to achieve and exactly what needs to be done to get there. Taking the time before the project begins to create a workable management plan will help you keep focus and keep costs contained.

Your management plan should include, at least, these three elements:

Research:

As soon as you start considering the purchase of a manufacturing ERP solution, and you have a good idea of what you want it to do, take time to investigate what the marketplace has to offer. Don’t settle on a first option until you have thoroughly investigated alternatives for quality and price. Don’t be misled by hyperbolic ad-speak. Truly understand what your options are and which solution will fit both your needs and your budget.

Project timeline:

Be sure to map out your project from start to finish. Be realistic about what can be accomplished and how long it will take. A reliable ERP partner can help with this. Sticking to a predetermined schedule will help prevent escalating costs due to random input and “wish list” shopping by potential users. If you do need to add to your scope, it will come with deliberation and an eye to its impact on your overall project budget.

Return on investment:

Your bottom line will depend on more than up-front cost savings. Try to anticipate the mid-term and long-term impact your decisions will have on your business. Efficiency and future savings should matter at least more than the initial cost.  While saving IT project costs is always important, the real return from an operational ERP investment will come from within the customer service, sales order processing/fulfillment, and production cycles.  Moreover, this return is not only in the actual system usage efficiencies but also in efficiencies in all aspects of operations and improvements to all areas of customer service.

Stick to your actual needs

Evolving ERP projects rarely result in spending less than you initially figured. In fact, the opposite often occurs. As questions and options arise, carefully assess each with an eye on your master plan and on your budget. While it might be nice to have all the bells and whistles, what do you actually need now? More importantly, what will you actually use now? Return to your initial plan and determine what, if anything, additions would do to improve your ROI or positively impact your organization. Don’t change your project’s scope without being very sure that it will make a meaningful difference.

Negotiate your deal

Remember that many vendors operate in a client service industry and that you have options. Do not let yourself be pressured into paying for packages or options your company does not need or may not use.  Stick to your plans and purchase what will work best for your business, your goals, and your budget.

Manufacturing ERP projects need not run your budget into the red. Contact Custom Information Services and let us show you how to rein in ERP implementation costs.

By Custom Information Services, www.customis.com

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