Upgrading or installing a new Enterprise Resource Planning ( ERP ) system completely can be a big task for any company. Not only is ERP software expensive but it can also take between several months and one year to properly integrate into networks and start seeing the performance advantages that this system promises; anyway, the tremendous benefits that the technology provides makes going through this process worthwhile for many businesses.
Initially, business process needs should be considered, and executives and IT specialists need to determine whether current systems are running effectively. If ERP upgrades can provide answers to demands then the time for ERP investment may have arrived.
Whenever any business looks for an upgrade, their first attention is the cost that they need to spend on the upgrade. ERP upgrade also has the same story, but ERP upgrades have some points which help to make them uniquely different. They are not a one-time investment, but an investment where the business has to spend for an elongated period.
Today, we will go forward and try to discover the critical question of how to calculate the true cost of an ERP upgrade. Many organizations are confused on how and when they need to spend the money for the upgrade. We hope this will surely help you to recognize the different aspects of the cost associated with ERP upgrade. The important things should be considered during ERP upgrade is listed below.
The upgrade, in itself, will carry its primary cost. It includes the consultation fees to the consultant or partner. The cost of the hardware and software should also be included within this. Other costs that are associated with the upgrade is internal the opportunity cost of the finance team and others, IT personnel costs etc. In short, the cost of an ERP implementation project should be expected to cover the expenses of the software, training, subscription costs, personnel, and change management etc Sometimes you need to spend on the operational Support of ERP (it depends on the policy of the consultant).
2. What about the Infrastructure
The Cost of infrastructure Includes the cost of any additional equipment needed for the upgrade, such as additional servers, new computers or devices like the biometric machine, network/connectivity upgrades, etc without proper infrastructure, it is tough to run or implement anything.
3. Maintenance and Support
This includes maintenance for a day – to - day operations, and any support required to keep your ERP software and infrastructure up and running .ie, maintenance and support for small upgrades, cleaning database, doing timely maintenance/upgrading of the system.
In the end, there are many ways to look at the ERP upgrade. For example, Odoo or open ERP integration/customization and upgrade improve costing due to free licensing and open source nature.
4. Status quo opportunity cost
5. Support project costs:
ERP is a big project and it requires small projects to run alongside for a successful run. The mini projects are carried out all over the year and it can easily include the fixes, patches and other forms of the features and functionality add-ons.
It is important for companies to evaluate the market and make decisions appropriately. The cost associated with ERP upgrade is definitely not a small amount and that is why sufficient time should be needed to take decisions on ERP upgrade.
For more information regarding cost related to ERP upgrade, do not forget to contact us.