So many ERP options, so many moving parts in each product, and so much flexibility in configuration, many organizations seeking out cloud ERP software suffer from paralysis by analysis. This is only made harder when each vendor seems to have an endless cavalcade of partners who can put the solution into use. Too often, companies will get almost everything they need from a product—only to find out that their partner can’t put it into action. With timeframes measured in years or decades, ERP is all about getting long-term value from a solution.
However, many end up leaving value on the table. How? Poor product or cultural fit, unscrupulous vendors or salespeople, and unforeseen costs all stand in between your company and the value you need.
How to Extract More Value from an ERP Solution
So how can you work to address the weak points in the selection process? How can you find a product and partner able to help you extract the most value from an ERP decision? Following our articles discussing the technology, functionality, and productivity features to seek out in an ERP project, we would today like to help you discover opportunities to make the most out of a journey.
In this, we would like to discuss some of the questions to ask and the options you have on your journey to cloud ERP, exploring what goes into securing each.
1) Is This Going to Minimize the Total Cost of Ownership?
ERP has a long life. Whether this is your first foray into the cloud or you’ve been working with a cloud vendor, you first need to ask whether the product is going to pay for itself—and how fast it’s going to do so. From total cost of ownership to payback period to return on investment, being able to understand how each works.
Total Cost of Ownership
This starts with Total Cost of Ownership, a factor that includes licensing, implementation, support, hardware, upgrade, and hosting costs. One of the first considerations and calculations you need to make, this consists of four criteria:
1) Software fees
2) Implementation people costs
3) On-going infrastructure expense
4) On-going people cost
While a legacy system will put much of this up front, you need to plan for ongoing maintenance fees that can run you about 18% of the current list price of the software every year. Add this to the other notable costs including downtime during implementation, infrastructure expenses, retraining of employees, creating a budget for future customizations, software upgrades, and more, and this is a key factor in the short- and long-term.
Payback Period and Return on Investment
With the total cost of ownership calculated, you can then turn your attention to the time it will take to pay for itself—and the returns you get after the fact. From cost reductions to direct and indirect benefits, extracting value will require you to understand how each of these work before making the move.
The Investment in a Partner: Helping You Make the Most out of ERP
In the same way that a software improvement can help you get the most out of your business, the right partner can help you get the most out of your software. Whether it’s in the form of honest up-front pricing, top of the line training, or simply their ability to execute, the right partner can go a long way in ensuring ERP value. Learn more about finding the right ERP partner here.
2) Is This Going to Help or Hinder Growth?
Companies expect their ERP to help facilitate growth. Whether it’s being able to process more transactions faster, speed up the workflows that your business relies on, or provide a better connection, being able to understand how much this will cost now and in the future is going to go a long way in helping you understand the value and the benefits.
Scalability is the ability to accommodate heavier volumes, more resources, and more users as your business grows. But in this, ask whether you pay only for what you use or if you can add more resources when you need them.
Much of the ERP landscape was defined on per-user pricing. Whether that was a per-license cost in legacy ERP or a per-user fee in the cloud, scaling your company shouldn’t result in scaling your costs.
When looking at legacy products, you’re going to need to understand the additional resources needed as you grow. At sometime in the future, you’re going to need to look at more hardware to handle computing power and data storage. Additionally, many cloud vendors rely on a per-use basis—meaning that each new user added increases the monthly cost—no matter how much a product is used.
How Resource-Based Pricing Delivers Value
However, Acumatica took a different approach, allowing resource pricing. Not only does this make it easier to calculate short-term costs, but long-term ones as well. With Acumatica, simply ask the following to determine your price:- What applications do you want to start using now?
- What type of license are you considering: SaaS Subscription, Private Cloud Subscription, or Private Perpetual License?
- What is your projected level of consumption based on the volume of your business transactions and data storage?
The Honesty of a Partner: Get What You Want and Get an Accurate Picture of Costs
A business should be able to understand its own requirements, so it can ensure it’s fielding the right potential implementation partners. It helps to know: what techno-functional needs the business is wanting to achieve through the new ERP system; what machines, software, and other systems that will be either integrated into the ERP or replaced by the ERP; and what kind of user experience (UX) interface will suit the company culture. A true partner, like Cloud 9 ERP Solutions, is going to present you with the costs today, as well as potential costs in the future, helping you understand the costs involved with growth-focused functionality or things considered nice to have.
Verifying a potential implementation partner’s qualifications isn’t always easy, but it’s worth the effort to properly vet final candidates — a company’s success depends on it. To learn more, read our guide Choosing the Right ERP Implementation Partner.
3) Is This Going to Work with Us—Or Are We Playing by a Vendor’s Rules?
The third most important factor in extracting value from ERP comes in the form of customer-focused business models. Many vendors will work to get the sale, only to hide the fact that you’re going to have to pay to export data, that a change might not be possible without immense customization, or that you’ll be relying on a consultant to make tiny changes.
These are challenges in the ERP community, and challenges that Acumatica’s CEO recently called out.
“Selecting the right SaaS business applications is more than researching what the product can do. Your selection must also be influenced by the cloud and SaaS vendor’s software business and SaaS End-User License Agreement (EULA) practices. Unfortunately, these practices are not always above board, creating a huge challenge for customers. However, Acumatica has accepted this challenge on their behalf.”
In this, they hold themselves and their partners to a higher standard by establishing the Acumatica Customer Bill of Rights. These ten criteria provide a clear picture of what you get, what you are entitled to and how Acumatica makes this possible. Acumatica customers have a right to:
1) Easy to understand and not frequently modified End User Licensing Agreement (EULA)
2) A flexible, open platform for rapid integrations
3) Consumption-based licensing that does not inhibit business growth
4) Sustainable pricing with annual increases of no more than 3%
5) ERP implementations without hidden fees
6) Deployment flexibility
7) Ownership of and access to THEIR data, anytime
8) Consistent, 24/7 customer service
9) Local business expertise
10) Dual layers of support
In this, Acumatica holds its partners to the standards it promises, and as a Gold Certified Acumatica Partner, we not only meet these, we go beyond them. Better yet, we have a track record to prove this. Want to learn more? View our testimonials and case studies.
You’re In Control - Get More Value from the Right Vendor and Partner: Cloud 9 ERP Solutions
If you’re looking to make the most of your ERP decision, you need more than this. If you’re looking for a better way to compare solutions, the free ERP evaluation checklist can help. This free resource discusses ten features that make you more productive, the top functionality decisions you need to make, and the most important value considerations you will need to look at.
At Cloud 9 ERP Solutions, we’ve been in this business for a while and have helped countless customers like you to get what you need from an ERP solution. Browse our Acumatica demo videos or contact us for a free consultation.