The ERP implementation
cost depends on the type of hardware, software maintenance, internal cost, the
vendor charges, and on the hidden costs. But due to the recession the cost of
ERP implementation has been reduced in the last year. For example, in 2008 the
average cost of the ERP implementation was of $8.5 million while n 1010 the
cost was reduced at $6.2 million.
The company must choose
the software according its needs. The small and middle sized companies can opt
for a client server module while the large organization might select N-Tier
modules. Those companies that have retail units indifferent locations might go
for multi location ERP solution, while many other companies might choose ERP
software that can offer solutions in different remote geographical areas. So
the ERP software cost can be determined according the software functionality
and the depending on the user' request.
The consultancy cost is
included in the ERP overall cost. So the costs of an external ERP expert are
added to the ERP software cost.
There is also a
customization cost that must be taken into account. Many ERP packages might
need additional customization and for this some vendors might charge additional
charges.
Data conversion is the
most difficult job when it comes about software implementation. Data conversion
implies the process in which the organization historical data is integrated in
the new software. The difficulty of the implementation process consists in
ensuring the data accuracy. The proper functioning of the software depends on
the accuracy of the data that are transferred into the new database.
Tasting cost can also
determine the overall ERP cost. Testing the new software is a very important
process because during the testing the errors are corrected and the software
bugs are fixed. During the tests you can check the integration level, you can ensure
the correctness of the transferred data and you can ensure the software
scalability to determine if the software is able to handle a certain number of
users.
There is a training
cost, too. After the software has been implemented the company employees must
be trained to use the new software. If the employees are not initiated in
handling the ERP software they will find very difficult to use it.
When we talk about ERP
implementation cost we have to talk about hidden costs, too. There are a series
of hidden cost that cannot be seen from outside but the companies that undergo
the automation process often confront with them. These hidden costs consist in:
the period of time necessary for the resources and employees to familiarize
with the new software and to be able to use it properly. It is well know that
during this period the software productivity is minimal and this fact is
considered a hidden cost.
Another hidden cost is
considered the replacement cost. Many times the companies must discontinue the
old system in order to replace it with the new one. Because the replacement of
the hardware attachments is not included in the ERP initial cost we can
consider it a hidden cost, too.
Read about Disadvantages of ERP Software. Also know Tally 9 Features, Advantages.
Article Source: http://EzineArticles.com/?expert=Jhon_Napier
Article Source: http://EzineArticles.com/6055174
Microsoft Navision ERP Software for leading multinational client of manufacturing domain. We provide standard enterprise resource planning implementation service to manage their daily Financial and Manufacturing operations.Microsoft Dynamics NAV very effective to improve work efficiency and maintaining over all database of the system.
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