Cost-benefit of ERP implementation

Surely if you are here it is because you have realized that the adoption or not of technologies is determinant for the growth or ruin of a company. Surely also, as a project leader you are already evaluating and considering the implementation of a comprehensive enterprise resource management system.

However, in this fast-paced world, it is difficult to be sure about the right time to invest in technology, when to implement it, what the main benefits are and how much it will cost.

Indeed, technology is a critical piece that makes it easier for companies to do good business. Technology is as you imagined it, so it must bring value to your company, so it is not only about acquiring technology, but to look for the one that meets the needs of your company, that represents a quick return on investment, in addition to optimize processes and promote favorable practices.

What is an ERP?

ERP is a comprehensive enterprise resource management system that has the ability to automate and adjust each and every one of the processes of a company; from the inventory, HR, logistics and production areas, as well as the financial, sales and commercial areas. It is a system capable of covering and streamlining all processes. It also provides a centralized base of information in real time and adapts to the stage in which a company is, facilitating scalability as required by the growth of each company. The main function of this type of software is to facilitate planning and make processes more efficient.

This streamlining and optimization of processes, as well as the single, centralized and real-time database, represent the unification of information and efficient communication between the different departments, which makes it much easier to make decisions within the company.

Implementing an ERP system can represent a good investment of time and obviously a considerable monetary outlay. There is no doubt that each and every area of a company plays a very important role, that is why it is advisable to consider the positive effects that will be obtained at a global level when implementing this type of software.

What are the benefits of implementing an ERP?

There are different perspectives and evaluations regarding the different benefits and impacts expected when implementing an ERP system. Within the market there is a great variety of suppliers and brands, some specialized in the development of customized software, which usually have a much higher cost, and some others have ERPs capable of adjusting to the most common needs of a growing company. However, the implementation of an ERP represents some general benefits for all companies.

Some of these benefits are:

  • Integration between application functions, because with an ERP system it is possible to integrate all business processes and effectively manage each of your departments' needs through a single solution.
  • Empowerment and growth of your company, since with an ERP your information is optimized strategically and deeply, reducing up to 70% in analysis times.
  • Minimizes management costs and increases the return on investment, since it optimizes processes, these require less time and less use of human resources, so they can focus on other areas, promoting proactivity and collective improvement, but also, this streamlining has as one of its main effects, generating, agreements, sales and income much faster, and thus, it facilitates the recovery of the investment.
  • Control of the different cycles regarding the main cycles of a company, an ERP allows you to have a better control, from the supply cycle and warehouses, demand, production and projects to the cycles of after-sales services. A software of this type allows you to take control of your company.
How much does it cost to implement an ERP?

The acquisition and implementation of a technology or digital tool usually represents a significant investment, so it is common to ask questions about the investment. In the particular case of ERPs, there are some important points to keep in mind.
  • The cost of its implementation will depend on the licenses, both of the ERP and of your databases.
  • For its implementation, specialists and developers are required.
  • Similarly, and depending on your pocket, your infrastructure capacity and the needs of your company, the cost will also depend on the hosting system in question, whether it is a physical server or in the cloud.
  • And of course it will also depend on the staff and the company's objectives.
The costs of one of the main referents of these services, SAP, with its version and licenses of SAP Business One usually range between $2,700 dollars per user and $4,800 dollars per user for SAP S/4HANA, however, this is only a part of what is involved in the implementation of an ERP, before this, it is best to get advice from specialists and obtain a detailed diagnosis of the total investment according to the needs of each company.

Fortunately there are suppliers that offer quite accessible and efficient packages that focus on helping SMEs to grow, including all the modules, with a quick implementation and very easy to use, with an incredible accessibility and scalability, all this with a single payment that is also 100% deductible.

These packages are usually designed according to the different industries, so the cost will also depend on the line of business of your company, whether it is a trading, service or production company.

You can find in the market packages with cloud server, implementation, training, support, updates and maintenance, starting at $2,000 MXN (monthly per user) for service companies, $2,500 MXN for trading companies and $3,000 MXN for manufacturing or production companies.

As you can see, nowadays companies have more opportunities to become competitive and keep up with large corporations.

The world tends more and more to the use of technology, but in the face of resistance to change, making the decision to implement this type of technology will bring great benefits to your company, you will be able to plan better and make good decisions, in addition to giving you a strategic advantage over your competition.