How to determine Total ERP Software Costs.

10 Questions to Ask Any ERP Vendor.

Besides the license fees, there are many other factors you need to consider when evaluating the total cost of owning an ERP system. Here are the key questions to ask:

1. How much is the license fee?
2. Does the licensee fee include all modules or will I have to pay for add-on modules?
3. Does the ERP system require expensive database licenses (Oracle, SQL, etc)?
4. Will we need expensive servers and server maintenance contracts?
5. Will we need to hire/contract a database administrator?
6. How is the maintenance contract calculated? As a percentage of the software license and the implementation fees, or JUST the license?
7. Is support included in the maintenance contract?
8. How much of my time will it take to install, setup and customize the system?
9. Is setup and implementation included in the price or will I have to pay extra for that?
10. Will we need to hire/contract an IT resource to update/maintain the system?

Benefits of a Good ERP Software Partner

A good partnership will mean a smooth implementation, comprehensive training and ongoing support by a profes-sional team you enjoy working with.

Some ERP Partners do a good job of selling, but fall asleep at the wheel when it comes to installation.

So, how can you be sure you are choosing the right company for your business?
You need to do your homework to find the best Partner for a solid, long-term relationship in all areas.

Choosing the right company to install, implement, support and train you can make the difference between the success or failure of your project.

ERP Project Quote Worksheet

Take the figures highlighted throughout this guide and enter them in to the boxes below to give an estimated cost for your ERP project.

ADD: The number of software users:
Multiply by: Price of software per user:
ADD: Maintenance fees:
ADD: Cost of add-on products:
DEDUCT: Discounts or promotions:
ADD: Service implementation costs:
ADD: Data conversion costs:
ADD: Integration costs:
ADD: Customization costs:
ADD: Project management costs:
ADD: Training costs:
Note: Ongoing support fee/Hourly rates:
ADD: Hardware costs:
TOTAL ESTIMATED ERP PROJECT COST: $xxx.xxx.xx

Tips to Choosing the Right ERP Partner

When considering a ERP partner to your ERP implementation, there are some key elements that you should be aware of. The key is to choose an ERP provider with strong core values such as experience, integrity, honesty, efficiency, and most importantly communication skills ! talk the same channel
Much like hiring a contractor for your home, asking the right questions and being ....

Now Is A Great Time To Invest In A New ERP System

You may be asking yourself how can I think about spending money on a new ERP system in this economy?

The truth is, it‘s the perfect time to replace your inefficient, out-dated legacy system with a new one that provides easier and better access to the critical information that will help your business jump ahead

Top Ten Criteria for Selecting ERP Software

Top Ten Criteria for Selecting ERP Software

1.Level of support from the solution provider
2.Vendor’s track record of performance
3.Software’s ability to fit the business
4.Growth potential of software
5.Price of the software
6.Quality of documentation
7.Functionality of the software
8.Ease of use
9.Ease of implementation of the new system
10 .Software works with existing hardware

Take Baby Steps During ERP Implementation

Take Baby Steps During ERP Implementation ~ Don’t Overwork or Work Over your Employees

Obviously it is important to have ‘buy in’ from your employees when implementing a new ERP system. Change is rough for many folks, but if there are clear, exciting, simple goals set at the beginning of the implementation project, your success will be within reach!

Why Do So Many ERP Projects Go Over Budget?

Why Do So Many ERP Projects Go Over Budget?
The most common reason accounting software implementation projects go over budget is because the Partner is spending time working on things not included in the original quote.This work is called out of scope.

Here are a few examples of how this can happen:
You see all the cool things the new system can do and find yourself a kid in a candy store saying, "wow , can we get it to do this too ? The answer is yes, but this request is beyond the scope of the original proposal

You were quoted 8 hours of training for the AP clerk. This AP clerk is slow to learn, or is replaced by a new person halfway thru the project. The Partner must spend additional training time that was not included in the original quote.

You have a report you require from the new system, but you didnt show it to the Partner in advance because you just assumed it would be included. It needs to be designed from scratch and this time wasnt included in the original quote.

A good ERP Partner will tell you in advance if work needs to be done that was not included in the original quote, and get your approval before moving forward.

ERP Server: Do you have what you need?

It is highly recommended that mid-market accounting packages, such reside on their own dedicated server.

Your Partner will be able to provide you with the minimum system requirements, but servers come in “Honda Civic” to the “Rolls Royce” versions so you will need to rely on a trusted IT advisor.

If you decide to set up a portal (a secure online site to view data) for your system, this may require an additional server called an IIS server.

Business Intelligence and Reporting Services may also need to run on a separate server.

If you have a large number of reports, and run them on the same server as your application, it can dramatically impact performance. The result is frustrated users and complaints.Plan ahead and distribute the processes evenly across multiple servers if necessary.

The ERP hardware requirement

Many companies carefully budget for the costs of the software, the services, and everything in between, but they forget to factor in the costs for the hardware required to make it all run. Missing this cost can be a painful stab to your budget.
We have outlined a few of the critical hardware pieces to factor into your budget.
Many accounting software Partners do not sell hardware, but they should have partnerships with experienced IT companies who can review your options with you.

ERP Support

If your Partner has the technology to remotely connect to your data from their office, it can significantly reduce your support costs.

Face to face meetings are great, but if you want to save money, let the Partner support your system remotely.

What data will be used for ERP training?

What data will be used for ERP training?

For best results, your Partner should set up a test company for the purposes of training using your own company data.

This will stay separate from the actual database you will use when you go live.

If your users get trained on fictitious sample company data,the impact will be diluted when they start to work with your own data and processes.

ERP Training: The Key To Happy Users

Training: The Key To Happy Users Knowing how to use your new system effectively is the key to making your investment worthwhile and keeping your users happy Training is definitely one area you donϜt want to skimp on.

The best Partners have dedicated, experienced people focused on training. Take note : a highly skilled implementation consultant does not always make a good trainer! Ask to meet the trainer or to audit a training session so you
can evaluate the quality of the training.

ERP Project Manager

Will I have a specific ERP project manager assigned to my project ? what is the Person's experience level ?

Ask to meet your project manager in person. Make sure you like their personality and trust their expertise, as you will be working very closely with this person over the duration of the project.

Insist that this person be at all critical meetings over the course of the project. For the most successful project, assign someone to manage the process on your side and to communicate regularly with the Partner.

Make sure the proposal clearly states who is responsible for what - on your side and the Partners side.

ERP Customization

Customization & Custom Development: Proceed with caution!
Minor customizations made by an experienced Partner can give you the one feature you need to make the software a perfect fit.

But major software customization should only be considered if you have a business critical process that cannot be changed.

Save: To minimize customizations, take the time to fully define and review your internal processes. This exercise may uncover ways you can be more efficient
using the software as it is.

Ask the ERP vendor Are they work with the software with source code?

If customization work is not done by the Partner installing your system, this should raise a red flag! This means you may have to rely on an outside programmer. You want all support to be provided by a Partner who is accessible and has a verifiable reputation.

If major customizations are required, a Partner that is authorized to work with the source code of the software system can likely do faster custom development and save you money.

ERP Data Conversion

Tips for ERP Data Conversion :
One way to save money is to convert data from the old system at a summary level instead of a detailed level. For example, convert a summarized journal entry for an entire month's activities instead of bringing over every journal entry historical data for the month.

Making Sure You ERP Software Doesn’t Become Shelfware

Buying the software is just the beginning. You need additional services to get your accounting system up and running,convert your data and train your staff.This is where choosing the best ERP Partner and asking the right questions proves extremely valuable. An honest Partner with a proven track record, repeatable processes and experienced staff will take less time and save you money.

ERP Maintenance Fees

Maintenance Fees is a Insurance you actually need for your ERP Software

Just about every software vendor will require you to pay an annual fee based on a percentage of the software list price.

This fee has various aliases such as maintenance fee or enhancement plan.

The percentage can lower after the first year. The plan may not always be required, but it is always strongly recommended.In addition, your Partner may have their own annual maintenance plan for support calls, preventative maintenance checks or other services.

Tips to Save on maintenance fees :
Buy only what you need for Phase 1 of your project. The lower your initial software list price, the less money you will pay for maintenance. If you buy something you dont implement for another year, you just wasted money on the maintenance fee.

Maintenance fees are like insurance. We all wish we didnt have to pay it but when we needed it,we are sure glads it;s there. So, just add the maintenance fee into your annual budget and leave it there

Is the software server-based or web-based?

Is the software server-based or web-based?

Server-based software is installed on a server in your office.

Web-based software is kept in a data center far, far away, and is accessed over the internet. Some web-based systems may appear to have a lower per-user cost, but in many cases you are only getting core functionality and may have to pay extra for additional features/modules.

Be sure to compare the costs over a 10-year period as this is the average amount of time a company keeps their accounting software. A rising trend is to buy software on a subscription model,For some companies, this makes sense. However, be sure to consider all of the costs to determine if it really is less expensive overall.

ERP project Category

Any good Partner should be able to give you a ballpark dollar figure after an initial requirements discussion, but the final quote is usually presented after several conversations and demos.

A complete ERP project has many components and we will break it down into three categories:

Section 1: Software

· Licensing Fees
· Enhancement Fees
· Add On Product Fees
· Discounts

Section 2: Services

· Implementation
· Data Conversion
· Integration
· Customization
· Training
· Support

Section 3: Hardware

· The Server
· SQL Operating System
· Deployment Options