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SMB Manufacturers Guide for Budgeting an ERP Project

Once you decide to go for an ERP, it is time to devise an apt ERP budgeting plan. Read about the critical factors affecting the ERP budget.<br>

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SMB Manufacturers Guide for Budgeting an ERP Project

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  1. 5 Reasons For Moving In-House ERP To The Cloud ERP Implementation Fails to Avoid

  2. Introduction Talking about small and mid-sized manufacturing, here the business owners are self-reliant and have a versatile spirit. Wearing multiple hats, they are often the custodians who focus on enhanced productivity and better employee efficiency. It is said that a larger business comes with great complexity and challenges. However, small business, if don’t follow a proper channel, may be more intricate and difficult to manage. Well, the benefits of deploying ERP remains the same for large and small organizations. New licensing cost and delivery models are more affordable and feasible.

  3. 1. How to decide the ballpark ERP implementation budget? Fortunately, global ERP Software Market is expected to garner a revenue of approximately $56.8 billion by 2025, growing at a CAGR of 6.9% from 2016 to 2025. Deployment of ERP is quite a dicey game. You have so many reasons to think, so many factors to consider and so many options to choose. And of course, all these parameters decide the ballpark amount of the overall ERP budget.

  4. 2. How can ERP licensing fees affect your budget? Some companies may require ten licenses and others may require 100. ERP project cost obviously depend on the number of licenses you ask for. Moreover, ERP license can be temporary or perpetual, named or concurrent. As a business owner, you need to decide the suitable license number and select the ERP with the license policy compatible for your business. Generally, smaller companies need fewer licenses compared to the bigger organizations, and this is why the overall ERP cost is less for smaller companies.

  5. 3. How will customizations and add-ons affect the SMB ERP cost? If you need to have a dynamic system with out-of-the-box add-ons and custom-made modules, then a greater level of customization may also be required. And more customization means more cost. Small and mid-sized businesses may require less number of licenses but their necessities and the customization requirements may differ. The functionality which is best suitable for organization A may not fit well for organization B.

  6. 4. How will additional servers and hardware cost affect the budget? Server/ hardware cost is one of the reasons why manufacturers are choosing cloud deployment option instead of on-premise. With on-premise ERP, your company may need to purchase new physical server, some workstations, database server licenses, upgraded software and spend a fortune on IT personnel. On the other hand, cloud ERP saves you from such expenses as the ERP servers and databases are managed by the cloud service providers in state-of-the-art remote data centers. This type of ERP deployment has a subscription-based model and almost eliminates the overhead IT expenses.

  7. 5. How can training add to the ERP implementation cost? If your company is not using an ERP system, you need to consider adding one soon. SMB ERP has become a prerequisite for modern businesses. Well, we cannot be thankful enough to the proficient software trainers who methodically train the ERP users about the solution functionality and teach them to use the ERP solution efficiently in completing their daily tasks. Detailed solution training for the ERP users is a must for successful ERP implementation. Learning the tools and business processes is extremely important to ensure that every employee makes proper use of his/her skill in the organization after the ERP implementation.

  8. Conclusion ERP cost and its budget are subjective. The amount for an ERP implementationfor small and mid-sized businesses, may vary from a few thousand to many millions. Depending on multiple factors, you need to calculate and negotiate the right price and reach a conclusion for implementing the right ERP in your organization. To know more about ERP cost and ERP implementation best practices, feel free to contact us here.

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