How To Reduce ERP Project Cost? Revealing One Of The Best Way!

Project Execution

This is the #1 question that every Project Sponsor is asking!

How can we reduce ERP Project cost?

reduce the ERP project cost

A significant chunk of ERP cost is the consulting services. If you are serious to reduce ERP project cost, this is where we should be looking.

Now the question is how we can reduce the ERP consulting services cost?

Let me illustrate with the help of a simple analogy taking two examples:

You are building a house – The typical way

After the initial consultation, you work with the builder on your requirements. You and the builder sign an agreement. The builder builds the house and handover the keys to you. Simple!

You are building a house – The modern ERP way

After the initial consultation, you work with the builder on your requirements. You identify there are certain things that you should take responsibility for. So, you took ownership of tiling, carpets and landscaping. You get your family members and other small businesses to work on these. It helps you to save cost on building the house.

Nailing, How to Reduce ERP Project Cost?

Look, the design of modern ERPs wants you to take control. They are very configurable, flexible and you can personalise them without technical input. The key thing is being active and taking ownership of the implementation project.

The most successful projects are the ones where the Customer (you) take ownership. Often, the Customer takes complete responsibility of:

If customers have technical resources in their business, they can also take responsibility of:

  • Designing and developing Outputs (e.g. Invoices, Statements, Purchase Orders)
  • Integrations (integration of ERP with other systems)
  • Reports and Dashboards development
  • ERP Customisations to meet business needs

Note that you as a Project Sponsor must lead ERP projects from the front. Develop a cohesive environment where the vendor and your team works together. Ensure that ERP integration partner promotes to use of the standard ERP system. There must be a good reason for customisations, even if your team is capable of doing them.

The key is to learn the basics of ERP upfront. For example, learning about:

  • Key terms (Item Master, Work Order, Chart of Accounts structure)
  • Standard processes (Procure to Pay, Order to Cash)
  • General navigation
  • Standard tools (reports, personalisations, security set-up)
  • ERP knowledge transfer should be one of the first tasks when you start an ERP implementation.

I know this is a different mindset. Our typical approach is asking a vendor to do everything within the project. Modern ERPs have evolved to provide power back to business. Business stakeholders should understand this and leverage the opportunity and take control. As a Project Sponsor, cultivate the mindset to deliver a successful ERP at a reasonable cost.

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