Ready. Set. Implement!! The Budget for Your ERP Software

Posted by Jeff on May 30, 2017 at 11:07 AM

What your budget contains and how you plan to allocate it says a great deal about your organization's vision for how the implementation will proceed. We find that companies are frequently protective of their budget details in the initial conversations about Enterprise Resource Planning deployment. Such safeguarding tends to indicate a lack of confidence in the process, the numbers, or the consultant. Make sure you're working with a truly Trusted Advisor who you feel has your business's best interests at heart. Candid conversations about timing, motivation, and even budget are the best path to an honest appraisal and successful outcome. Here are some warm-up questions for talking about your project budget.

What does your budget include?

The central facet to a software implementation budget is, of course, the software itself. Setting this number as frankly and accurately as possible is what will allow you to evaluate your options for a solution. It will immediately eliminate certain choices and present all sorts of alternatives. Once you have reached consensus on your software budget, you can set the principal candidates next to one another and work through how the best ones in your price range address your priorities. That exercise will lead you to vendors and the next steps. At that point the other elements of your budget will come into play, including allotments for implementation, training, and ongoing support. Also, consider how Information Technology needs will come into play. After all, it's thoroughly discouraging when brand new software ends up hamstrung by hardware and networking limitations.

Are you intending to purchase or subscribe to the software?

The trend these days in Enterprise Resource Planning systems is to move to the cloud, which can actually mean several things. In it's purest form, cloud computing involves subscribing to a Software as a Service (Saas) environment, in which all hardware management, back-up, and upgrade responsibilities are displaced from the subscriber to the software manufacturer for a standard, recurring fee. Software hosting - which provides many of the same advantages as SaaS but returns some control over the environment and software to the company using it - can be a way to own the product but alleviate the burden of in-house Information Technology management. The point is that businesses these days have more options than just buying and installing ERP software on-premise, and each comes with it's own budgetary implications. It's important to familiarize yourself with the alternatives and ask your consultant about the best one to achieve your organization's objectives.

Are you looking for a phased approach to implementation?

Is your stated budget intended for the entire solution or just the initial phase? Even if you plan to deploy the components of your selected ERP solution over time, it's important that your budget at least speculate on the subsequent phases. There are too many examples of partially (i.e. incomplete) implementations out there, in which businesses myopically assumed that they would address the cost and timing of "non-essential" phases at a future date. If nothing else, listing all desired functionality will serve as a departure point for conversations about the cost of the comprehensive solution and remain present as a reminder of the ultimate goal throughout the project's first phase. As the implementation evolves and budget line items are recognized, the full breadth of the project will continue to be considered.

What strategies has your company used to develop budgets for large-scale projects? What tactics brought about the best outcomes? We'd love to hear about your experiences in the comments below. If you have a budget in mind for your own ERP project and would like to see how it aligns with your options, we're here to talk.Contact Us!

Topics: Business Essentials

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