Devising a detailed plan before launching an ERP system will be key, according to an expert on the technology. In a post on SearchManufacturingERP, Steven Phillips said companies need to make wise decisions and hold reasonable expectations when it comes to deploying ERP. A common problem behind ERP projects failing is managers having unrealistic expectations.
"Unrealistic time and cost commitments drive poor project decisions," he said. "Many project managers cut corners in an attempt to catch up to a plan that was never agreed upon or feasible from the start. "
To avoid falling into this trap, Phillips said manufacturing managers should determine realistic estimates of the ERP project schedule and budget before launching. This planning should include a list of assumptions, constraints and risks of the project.
Phillips offered guidelines of how long companies, depending on their size, can expect a full ERP system deployment to take. For small companies, that time frame is typically 9 to 16 months, and for larger companies around 24 to 36 months.
Another estimating tip offered in the article is the cost of an ERP project. Typically, the software represents about 20 percent of the total project cost. Consulting services, application development services, hardware and system software and education and training services are also included in the overall cost and should be considered by managers.
Its also a good idea to do some research to find the ERP system that will best serve a particular company based on business needs, size and the scope of the project.
Taking these steps will prove useful, considering how popular a technology ERP is proving to be, driving more businesses to adopt the systems that simplify warehouse and manufacturing operations, drive down costs and drive up productivity.
For instance, according to ComputerWorld, $1 in every $8 spent on IT budgets in Australia goes to mobile ERP solutions. Another survey reported that many businesses saw a return on their investment within one to three years from their ERP system.
"[Seventy-one] percent of companies reported recouping their costs of ERP implementation within one to two years after it went live," MidSize Insider reported.
Fortunately for those looking to implement an ERP system, many vendors offer training and work with the company from start to finish to determine the best solution for their needs and budget.