Have You Calculated the Cost of Not Switching ERP Systems?

There are some things that we keep putting off because we think that they are going to be costly and painful. For me it is going to the dentist! I think implementing a new ERP solution falls into that category for many organizations.

We have all heard the stories (or lived through) these types of IT implementations, but that doesn’t mean we should continue putting them off. Like the dentist, if we go on a regular basis, the cost of preventing that root canal is usually less expensive than having a more invasive procedure done.

RETHINK THE COST OF DOING BUSINESS

We need to re-think about the cost of doing business. We look at the bottom line and what our expenses are upfront or monthly, and then we put any changes to our obligations on the backburner until you are ready for this type of commitment. What we don’t do often enough is calculating the cost of NOT switching. It is a harder calculation, but one that is equally important.

We quickly forget that our time is worth something. We typically ignore the fact that there should be a cost associated to a task when we do it manually for something that could be automated. For example, think about all the reports that you pull, merge, and send to the different members of your team.

Even though it might only take 15 mins every week, let’s do a quick costing of this simple task:

• Time it takes to perform the task: 15 mins x 52 weeks = 780 minutes
• Time to train someone else when you are on PTO: 30 mins x 4 weeks = 120 minutes
• Annual time to pull one report: 15 hours (900 minutes)
• Your cost (at $50/hour): $750 per year

This is a simple task, think about more complex reports, consolidations, exchange rate calculations, and vendor/customer reconciliations just to name a few. If you asked everyone who is doing these “quick” tasks that only take 15 mins, how much is it really costing your organization?

I’m sure everyone in the company has at least one of these tasks or reports. For example, if you are a firm of 50 employees, we are talking $37,500 a year! (I don’t need to do the calculation if we start saying that this has been going on for years).

Another thing we should be thinking about it is: “what could this resource be doing instead of doing this task?” I think times have changed and we are not looking to cut resources, but we are looking at how we can get them to do more added-value tasks to keep these resources interested and engaged within our organization.


STARTSMART™

I would be lying if I were to tell you to neglect the costs associated to the services to implement a new system. There is a way to make sure that your budget doesn’t get out of control. It is by keeping the scope to what you really need and having in mind what additional features you’d like for future projects.

Here at Bam Boom Cloudwe call it our StartSmart™ methodology as we believe that if you have the right foundation from the beginning, it makes it easier to build a solid set of processes, rather than wait until everything is hanging on by a thread. Just managing versus thriving will create risks within your organization, from a security, data, and infrastructure position.

I’m challenging you to do the calculation and build that list of 15-minute tasks. That list is important. It doesn’t mean they will all disappear Day 1 after you have implemented a new system, but at least you know what it is costing you so you can prioritize which of the following features or reports that you should implement as an organization.

If you’d like to chat through how we can help speed up your processes and automate repetitive tasks, get in touch with one of our ERP gurus today.

By Bam Boom Cloud, Microsoft Dynamics 365 Business Central partner offering fixed-scope and fixed-fee projects.

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