The acquisition of new software is a huge undertaking, especially when you replace QuickBooks or other introductory software for a Tier 2 or ERP solution. However, as a business grows there will come a time when this transition is necessary as existing systems struggle to keep up and new business complexities arise. ERP software is important for growing businesses as it provides advanced functionality, can handle a higher volume of data and frequently replaces the need for hiring additional employees. The decision to replace QuickBooks and implement ERP will likely be one of the biggest business decisions you make in any given time period, and the right solution will require a large investment of money, time and human resources. To make the right decision, make sure you set a realistic budget for the project and focus on evaluating vendors and systems on more than just cost and functionality – including on-going dependability, after-sale support, customer satisfaction and company size. This does not mean that costs are not important and with more sophisticated functionality comes a higher price tag. However, there are various ways in which you can save costs throughout the entire software upgrade process – from search through implementation to Go-Live. Take the time to do your research and educate yourself on each part of the search, implementation and Go-Live process. Find a vendor you can work with as a trusted advisor to help you find the right solution, at the right price.
To start the process, we have compiled some information below on specific areas in which you can save money when replacing QuickBooks.
The deployment method you chose will have a significant impact on costs – both upfront and long-term. Although there is no right answer as to which method is better, there are certain situations where one will be more economical than the other. The easiest way to determine this is to accurately compare the costs of both, taking into consideration frequently overlooked costs such as hardware/equipment upgrades, additional software licences and the cost of on-going IT maintenance. Cloud-based solutions are built around a subscription-based model where a user pays on-going monthly fees to access the software and it does not require the purchase of in-house servers. On the other hand, on-premises solutions require a large, one-time upfront investment and the purchase/maintenance of internal hardware and servers. Based on this information, cloud-based solutions are often a better option for small and start-up businesses, whereas on-premises solutions are typically implemented in much larger organizations.
Number of Users
How a vendor charges for users will vary on the company and may include different models based on user settings and concurrent vs. named users. Before you start speaking with vendors, determine which employees need to use the system and how they plan on using it. Certain systems have functionality for specific user groups at a lower cost than if they had access to the full system. For example, mobile sales apps for use at tradeshows and by sales reps on the road, allow users to enter orders without needing to access the full system.
A well-thought-out implementation plan can help reduce costs in terms of training, data migration and set-up. As part of the implementation process, make sure to discuss with the vendor the plan in terms of how many days are allocated to each activity and which users/employees will be involved. During the training process, stick with your plan and don't get sidetracked with other issues/requests. It is often these small “side projects” that end up delaying the process and increasing costs. Instead, follow the Wish List approach to ensure your team receives adequate training for the most important processes during the time allocated. It is also beneficial to work with a vendor who has experience in your industry and therefore already understands your specific implementation needs.
Although there are a lot of ways to make sure you keep costs down during the implementation process, employee training is definitely one where you do not want to skimp. The software you implement will only be as good as the people who use it, and so detailed training and prepared users will ultimately save you money in the long run.
A proper data migration process involves mapping information from existing systems to the new software according to labels, titles, and structures, and involves additional “massaging” or “cleaning up” to ensure bad is not brought into the new system. At a minimum, consider migrating data pertaining to vendors, customers, and products, as well as historical sales data, A/P and A/R outstanding, open sales orders, GL account numbers and balances and inventory quantities. One option available to decrease data migration costs is to perform your own data migration by manually keying data from your existing system into the new ERP solution. However, although this process will decrease the amount you're billed by the vendor, it involves a lot of manual input and therefore time and labor costs. In addition, this method is heavily error-prone and does not account for the technical know-how to update information in the system prior to Go-Live. A better option is to only migrate necessary data and continue to maintain your existing database on its own computer as a reference to look up historical information as needed.
Bells and Whistles
Although it can be tempting to get all the system bells and whistles from new ERP right off the bat, these additional pieces of functionality are not always needed and can add to the project’s cost. With the right system, you will gain a lot of efficiency right from the start as part of the base package before you begin adding optional components. Work with a vendor who offers guidance on what components you require, as opposed to a vendor whose focus is on up-selling their product. Find a vendor who provides the option to add additional components in the future as this will save your company money upfront and provide flexibility for changing processes down the road.
Like additional components, software customization is a requirement that adds costs and may not be truly necessary. Consider whether the customizations you have are a result of carefully thought out workflows, or processes that have always been around. Perhaps there is a different/better way to perform an existing task and this is where a vendor with industry experience will become an asset. Don’t be afraid to consider alternative methods to performing tasks and question existing processes.
Internal Software Expert
The implementation process is not the end to your software costs. Once you Go-Live, additional maintenance fees and support fees will continue over the lifespan of the system. However, over this time period you will begin to benefit from automated processes and improved workflows - reducing costs in other areas. When receiving initial training on software, it's a good idea to assign an internal employee the role of software expert. This person should be familiar with the different roles and processes of the company and have a strong understanding of how technology can improve workflows and how software works. The idea with an internal expert is that they can help reduce costs by providing support to other employees (where applicable), and training to new hires.