Plan, then plan some more
ERP is an integrated system that is used to manage the resources and automate the processes of a company. It can be used to automate and improve just about any process that deals with manufacturing, with supply chain management, with human resources, and with financials and data. It has been referred to as “the present of computing,” “the future of computing” and “an invaluable part of business” by a panel of experts and software developers and designers across the nation. There is a longer definition filled with more technical details, but if that doesn’t provide a sense of what ERP can do for your business, well, just read the simple success story of Company A one more time. Then take a long look at the processes in your own business.
“Small and medium businesses do not have processes any less complex than those of larger businesses,” Attal says. “The challenge for small and medium businesses is that their processes are still complex and there are fewer resources to fix it. You need to bring as simple a solution as possible to a complex process, because whatever the size of your business, you need to automate your processes.”
The installation and implementation of an ERP system is neither an inexpensive nor a short project. The cost can vary depending on the number of your employees and the revenue size of your business, the depth and scope of the system you want to install, and the amount of training you want during the process. A simple system for a small business might cost less than $10,000. An average system might cost somewhere between $50,000 and $100,000. A much larger system for a corporation that has thousands of users and stretches around the world might cost millions of dollars. But an average cost, especially for small and medium businesses, is somewhere between $3,000 and $5,000 per end user, including the implementation, from the day you start installation to the day you are running live in production.
Similarly, the installation time varies based on multiple factors. For smaller systems, plan for at least three months, including end training. For larger systems, plan for at least six months to one year.
And the training is important. Consider it an insurance policy, of sorts, to make certain that your employees endorse the system and want to use it. If they reject it, you’ve not only wasted your money, but you have also taken a step backward toward different departments speaking different technological languages.
“There is significant training,” says James Barber, partner and CEO, ERP Professionals. “Not only will the end users who use the system to conduct daily operations need training, but they may also see their roles changing as they move to a new system because of how the processes are mapped out.”