A proper ERP implementation can be a valuable (and often necessary) asset when running a business, saving your company both time and money, while helping to increase profitability. Even so, getting up and running with ERP software like Microsoft Dynamics can be a costly endeavor. What’s more, it’s not a magic bullet that suddenly and inexplicably results in savings and profitability.
To control costs on your Dynamics installation and achieve the most benefit in the long run, there are a few steps you must take at the outset.
- Proper Planning
One of the most common mistakes companies make when implementing Dynamics, or any ERP software for that matter, is not taking the necessary time to properly map out exactly why they need it and what they want to gain from it. A great way to kick off this process however is not simply looking at the end result, but implementing a few Key Performance Indicators (KPI’s) to help you along the way. Here are some examples:
- Revenue Growth Rate
- Customer Satisfaction Index
- Percentage of Billable Time
- Underwork Metrics
- Percentage of Accurate Estimates
Moreover, it’s important to take a step back and look at how and why the question of needing an ERP system came up in the first place.
“There are many reasons a new ERP system will be sourced, but it is important to understand that the implementation of a new ERP system will not simply create a return on investment or solve the issues of the business,” writes the staff at SupplyChain247. “The process of implementation does not start with the initial inviting of suppliers to fill invitations to tender, it is when the company define the goals that the new ERP system will set out to achieve…If there is no clear goal, the process of selecting a product and vendor will be a futile process.”
- Data Migration
Closely related to proper planning is the need to determine exactly what data you need to migrate to Dynamics from your legacy system. While, in theory, it may be appealing to migrate every scrap of available data, doing so may require expensive add-ons to aid the conversion process, not to mention a lot of burned time on data you might not need after all.
“Using several additional integration tools, you can change your data with controlled and auditable methods. But that takes time in the consulting world, and time can translate into more service costs quickly,” said Gloria Braunschweig, President of Dorian Enterprises.
Determine what data you need to be able to alter, edit and manipulate, and migrate it over. For everything else, consider whether it might be cheaper to keep a copy of your legacy system for archival purposes.
- Deployment Options
Another important decision that can greatly impact cost is the method of deployment. One of the biggest factors here is choosing whether your business will go with a local or cloud-based installation.
Of course, each option has its own advantages. Overall, cloud-based installations tend to be cheaper to set up, and the monthly fee automatically includes necessary security updates, bug fixes and new features. The disadvantage to this deployment option is that you must pay your maintenance fee to remain operational. Any lapse and you could find yourself without access to a critical part of your business.
In contrast, a local installation has a much higher initial cost, but has the advantage of not requiring a monthly maintenance fee. It gives you the flexibility to choose when and how often to upgrade. The catch here is as with the initial implementation, upgrades can be a significant lump sum.
- The Right People
Choosing the right individuals is an often overlooked, but very important part of controlling costs on a Dynamics installation. Regardless of the methods and KPIs that you choose, getting set up is a time-consuming and labor-intensive process.
Choosing the right individuals with the proper degree of expertise and a clear understanding of your organization’s goals as they pertain to your Dynamics installation will help minimize unnecessary overruns. The right individuals will be able to efficiently move forward, rather than redoing things two or three times before getting it right.
Utilizing the right people also has additional benefits to your organization.
“Involving the right people has two major benefits. First, many of them know the business really well and can add a lot of value and input. Second, they are more likely to buy into the selection decision,” said Michael Burns, President of 180 Systems.
- Training and Support
While a cloud-based install may include regular updates to your installation, your organization may need technical support that is not included in regular monthly fees.
This is an area where striking the right balance between training and support can help you control costs. Many vendors offer several different levels of support, each at a different price point. The more support you need, the more it will cost your company.
In contrast, having well-trained employees may help to reduce the need for external support. This is especially true if your organization has an internal IT department. So while it may cost more upfront, taking the time and investing in proper training will definitely save you money in the long run.
Without a doubt, migrating to Dynamics can be an expensive and, at times, arduous process. With proper planning and wise choices however, you can do a lot to significantly control the costs of your Dynamics implementation.
About the Author: Curt Finch is the CEO of Journyx, a Certified Microsoft Partner. Journyx maximizes the value of Microsoft Dynamics by adding enterprise time tracking. Journyx Accountlink for Microsoft Dynamics allows companies to quickly implement a complete time tracking solution using existing business data in Dynamics. Connect with Curt on Google+.
About Journyx
A Certified Microsoft Partner, Journyx enterprise time and expense tracking software is an add-on that integrates with Microsoft Dynamics GP as well as Project Accounting. Learn more at http://journyx.com/dynamics.
The post How it’s Completely Possible to Control Costs on a Dynamics Implementation appeared first on goERPcloud.