If you’re in the manufacturing industry, chances are you’ve probably spoken with someone who spent a colossal amount on their enterprise resource planning (ERP) manufacturing software system. That’s because it is estimated that well over half of all ERP initiatives go over budget. It’s not hard to come across a horror story or two starring out-of-control ERP spending and over-budget ERP nightmares.
But there’s no way you’re letting that happen to your company, right? Here are some strategies for keeping your budget in check and managing your ERP spending.
- Plan, plan, and plan some more. There is no substitute for early, careful and thorough planning. In fact, failure to have a clear plan mapped out before diving into an ERP implementation is one of the most common factors behind costly delays. Be prepared to spend months developing a plan with specific goals and objectives. You need to be crystal clear on what you hope to achieve from the system and how you will achieve it. Include all departments who will be using the ERP system, and have each department define deliverables they want to attain. Then develop an organizational strategy based on accomplishing these objectives.
- Gain executive support and commitment. Executive buy-in is critical to the success of ERP implementation. Implementing an ERP manufacturing software system requires support and collaboration among all departments and processes within your organization. Ensure that executives understand why you are implementing the system and involve them in the planning stages. Not having full commitment may cause unnecessary setbacks, costing your business time and money.
- Be realistic. If you come to the table with an unrealistic idea of the costs and benefits of an ERP initiative, it’s going to cost you. Discuss all project costs with your vendor and work together to develop a realistic idea of what it will cost and how you will benefit from it. Then allocate sufficient resources to the project and establish a contingency fund for unknown variables that may arise during implementation.