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By now, most SMEs have realized that an ERP solution is necessary, but are still intimidated by its cost. Nevertheless, in the era of cloud-based subscription applications, providers have developed their solutions in a way that makes them genuinely attractive, offering multiple alternatives to their customers.
The implementation of an ERP system takes time and money, as we all know, but this is not all there is to it. In order to determine the actual cost, you also need to take into consideration the total cost of ownership (TCO), based on which you can then assess your ROI.
The expenses that an ERP system entails for small businesses are determined by 5 basic factors:
- Implementation: οn-premise or cloud
- Number of users
- Features and required modules
- Training expenses.
So, let’s take a closer look at these factors.
On-premise solutions are generally not ideal for small businesses. The acquisition cost of the infrastructure required for an ERP solution is clearly very high, so smaller businesses tend to opt for cloud-based solutions, which not only offer a quicker ROI but are also provided on a subscription basis.
ERP features and modules
Small businesses do not require complex ERP systems, which means that they don’t actually need all modules and features. So, why pay for them? Some of the most common modules are the following:
- Business Intelligence
- Customer Relationship Management (CRM)
- Human Resources (HR)
- Inventory Management.
So, before rushing to acquire a system with features that are literally useless for your business, take the time to consider what your true needs are. Make a list with the features and modules you need, and then find a solution that offers all you require. You can always add features and/or modules you might need in the future.
It is rather difficult for small businesses to spend additional money on customization, as they do not have the complex integrations that big enterprises usually have. So, work with your provider to find systems that can be integrated with the ones you’re already using, or can easily replace and/or improve your existing system.
This is an area that small businesses should really pay attention to. Training can adversely affect productivity, if not done properly. And while big enterprises have the necessary resources to train their people without diminishing their productivity, small businesses usually cannot afford to tie up their resources so easily. The help of your vendor that will provide the necessary training or offer the advice you need on how to complete training in the best possible way, is absolutely crucial in this case.