Looking For Info About ERP Software Selection?Generally speaking, the total of the human resources expense for an ERP (Enterprise Resource Planning) implementation is three to four times the original cost of the software purchased. Using that method (and assuming implementation in a m id sized enterprise), one should plan that an ERP package with a total cost of $4 million would involve a payroll obligation of about $12 million to $16 million. There are ERP vendors who plan to make more money selling their consulting services when they implement their product than they do from the actual sale of their software. The company that has purchased the ERP software should not pay an hourly rate to the seller for installation and /or consulting services. The sales and implementation contract should be written to obligate the vendor to charge one fixed price for all consulting and implementation costs. During the ERP software selection process, there is a real temptation to customize the ERP package that is being considered. The vendors depend on the custom modeling features of the package to help sell the package, and that is a good feature for businesses that really need to alter the standard software. However, there are so many software selections available now (think about the entries on the market from Navision and Syteline, as well as all the products coming out of the UK) that it is very possible that a package can be purchased that does not require custom work. The most common management and employee concern is that the implementation of an ERP will "change the business processes," This is potentially a very counter productive thought process. Improper or overly-detailed customization of ERP packages can carry a wallop of a cost when it comes time to upgrade the ERP software. Cost conscious managers will strive to understand that the expense associated with customizing ERP software is an ongoing expense, and must be willing to make reasonable changes in the way that they do business in order to insure a good fit with a standard ERP solution and a positive ROI. It is also very possible that the changes that need to be made in order to fit in with the software will turn out to be valid adjustments to the existing business processes. With that in mind, it is also vital that a business carefully identify all areas of competitive advantage that they possess in comparison to their competitors. An ERP software package should not and must not alter any existing systems or business practices that give the company any important advantage over its competitors. It would simply not make sense for a company that boasts its shipping and billing systems for a competitive edge to choose an out of the box ERP package to take over and change those vital business processes. |