top of page

The underestimated cost traps when purchasing ERP


ERP solution: hidden costs

Companies that decide to purchase an ERP solution face a significant strategic investment. The benefits of efficient Enterprise Resource Planning (ERP) are undeniable, but some crucial costs are often overlooked when budgeting. In this blog post we look at which expenses are often overlooked and why it is crucial to plan adequate reserves.


The obvious costs

Before we delve into the overlooked aspects, let's take a quick look at the obvious costs of an ERP purchase. This typically includes license fees, implementation costs, training and ongoing maintenance costs. Many companies take these items into account in their budget, but neglect the fact that not all expenses are covered.


Hidden cost traps

1. Customizations and integrations

ERP systems are rarely perfectly tailored to the individual needs of a company out of the box. In many cases, customizations and integrations are required to ensure the system works optimally. However, these adjustments can be expensive and require both time and expertise. A precise analysis of individual requirements and the integration of adjustment costs into the budget are therefore crucial.


2. Data migration

The quality of data migration directly influences the effectiveness of the ERP system. Transferring existing data to the new system is complex and can lead to unforeseen difficulties. Incorrect data migrations can lead to business interruptions and require additional resources to troubleshoot. Therefore, it is important to plan enough budget for a careful and thorough data migration.


3. Training and change management

Introducing a new ERP solution requires not only technical adjustments, but also employee training and change management. It is often underestimated that the human factor has a significant influence on the success of the implementation. The costs of training and change management should therefore not only be viewed as an expense item, but as an investment in the smooth transition to a new system.


4. Hardware and software infrastructure

Investing in an advanced ERP solution may entail the need for hardware and software upgrades. Outdated infrastructure can impact the performance of the new ERP solution and introduce security risks. It is important to identify these costs early and include them in the overall budget.


5. License fees for external modules

While the basic license is often easy to calculate, additional modules that cover specific requirements can lead to unexpected costs. A precise needs analysis and clarification of which modules are included in the standard package and which must be purchased additionally are essential.


The importance of key figures

When budgeting and planning, it is helpful to use key figures. These can give companies a clear idea of what costs to expect. For example, industry benchmarks or comparable projects can serve as a guide. A precise analysis of key figures enables realistic budgeting and prevents unpleasant surprises later in the project.


Reserves for unforeseen events

The cost traps mentioned illustrate the need to plan appropriate reserves for unforeseen expenses. A reserve fund of 10-15% of the total cost provides scope for unexpected adjustments, data migration difficulties or additional training needs. This buffer is critical to ensure flexibility during the implementation process.


Conclusion

Purchasing ERP is an important step for companies to increase their efficiency. However, it is crucial to identify the underestimated cost pitfalls and address them proactively. With thorough planning, transparent contracts and a realistic budget, companies can successfully overcome the challenges of purchasing ERP.


Frequently asked questions

How to minimize ERP implementation costs?

Through a detailed needs analysis and clear communication with the provider.

What role does employee participation play in cost control?

How long does it usually take to implement an ERP system?

What alternatives are there to traditional ERP systems?


9 views0 comments

コメント

5つ星のうち0と評価されています。
まだ評価がありません

評価を追加
bottom of page