Factors affecting ERP implementation cost and ways to reduce costs

ERP implementation cost is one of the issues that businesses focus on and are concerned about first. So what factors affect the cost of ERP implementation? How to optimize this cost? This article of Viindoo will reveal the secrets of effective cost reduction.

Factors affecting ERP implementation cost

The cost of implementing an ERP business management system is affected by the following factors.

Business size and number of users

For businesses with a high number of employees, vendors will need to analyze and collect a variety of data from the business to come up with the optimal plan and to solve problems that are more complicated compared to those in small businesses.

Besides, when the enterprise intends to expand, develop business activities, and add new users to the system, the cost will increase.  

Therefore, ERP implementation costs will be affected by the size of the business and the number of users.

ERP implementation cost

Enterprise size and number of users

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Number of features

Large enterprises with a wide scope of business and numerous departments will choose a comprehensive ERP system.

However,, applying the same model would be a waste of money for small and medium-sized businesses. Thus, the enterprises should depend on its purpose and the number of required features to decide appropriate ones, avoiding huge ERP implementation cost.

Additional services included

In the ERP solution implementation process, many vendors also have additional consultation services, surveys, a training course for employees or software development based on demands, system upgrades, On-Premise installation on corporate servers, etc.

The above factors more or less affect the ERP implementation cost.

In fact, it is unnecessary to use the entire service. Alternatively, businesses can utilize available software and actively gain more information through support documents and tutorial videos.

Staff’s determination and willingness to transform

The company's employee plays a significant part in the success of the ERP project implementation. When all employees of the company are determined and ready to switch to ERP software, the implementation process will be more smooth, avoiding unwanted problems.

This not only saves time for the ERP implementation process but also slightly reduces ERP implementation costs for training.

ERP implementation cost

Factors involved in an ERP implementation cost for businesses

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Secrets to minimize ERP implementation cost

Viindoo suggests the following ideas that can help businesses optimize the ERP implementation cost.

Stratifying the implementation roadmap

Instead of planning a long campaign, businesses should divide the process into phases and the number of features to implement in each phase, such as research and planning, allocating suitable personnel to the tasks, stratifying ERP implementation features, etc.

In these ways, businesses can easily control the implementation process, limit errors and make the necessary adjustments. This also helps to ensure high efficiency and reduce ERP implementation cost.

Setting up reasonable expectations

All businesses want to fulfill great expectations and earn huge profits in a short period.

However, if an enterprise sets unrealistically high goals and expectations in the first step it will make the whole project prone to failure. Businesses should start with moderate expectations and gradually heighten them. This will be a foundation for businesses to easily conquer greater goals.

ERP implementation cost

Setting up reasonable expectations helps businesses lower the cost of ERP implementation

Choosing reliable partners

Each ERP deployment company will offer businesses different solutions and costs. It is misunderstood that ERP systems with higher price will be more effective and completely suitable.

Accordingly, it is necessary to consider the purpose, requirements, business size, resources, and actual business situation before choosing the partner. You ought to ensure that the vendors are reputable, highly skilled, and experienced. They also need to be ready to support, consult, and closely monitor the ERP implementation.

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ERP implementation cost range from initial consulting costs to post-implementation maintenance and handover costs. However, Viindoo hopes the above secrets to minimizing ERP implementation costs can help businesses build a suitable, effective ERP implementation plan.

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Factors affecting ERP implementation cost and ways to reduce costs
Viindoo Technology Joint Stock Company, Van Anh Nguyen July 29, 2022