You are about to make a milestone decision: choosing your ERP system. You have done your due diligence. Considered competing solutions. Evaluated purchasing costs and functionalities. But, did you consider maintenance costs or future upgrade expenses? Perhaps not! There are several other hidden costs that that might come back later to bite you. It is therefore, absolutely imperative to consider the total cost of ownership early on in the ERP selection process. This will leave you with no rooms for surprises in the future.
What is Total Cost of ownership (TCO)? Total cost of ownership refers to estimate of direct and hidden costs associated with an asset, accrued throughout its entire life cycle. TCO enables calculation of return on investment. For an ERP software, TCO goes much beyond purchasing cost, installation, configuration, and development. It also includes training, maintenance, repairs, upgrades and ongoing IT support costs. Consider your company needs, software implementation strategy, and future time and money investments, to estimate the TCO. In order words, your ERP vendor should walk you through every step of the before-during-after lifecycle of ERP implementation.
In the context of ERP software, the first TCO component is the software fees. This includes the license and maintenance costs. The second component is the implementation cost including staff and consultant time. The third component is the on-going maintenance and repair costs. The fourth component consists of on-going costs related personnel time for the software upgrades, custom development etc.
Why is it important to consider TCO? Calculating your TCO will save you a lot of pain in the future. Imagine that an unexpected software bug emerge and you do not have support services. Or maybe you need software upgrades for which you have to shell out additional dollars. Any such scenario is bound to hurt you and negatively impact your business. However, if you are well aware of the TCO of your ERP solution upfront, you will be in good shape. You may also want to consider TCO of on premise solution versus cloud ERP solution. Being well prepared from the beginning means no hidden costs and no unpleasant surprises in future.
Partner with Advanced Solutions & Consulting? ASC has been at the forefront of implementing cloud ERP solutions since the past two decades. Recently, the company has been honored with an award from Acumatica for superior customer satisfaction and value addition (Fig 2).
A leading certified Acumatica reseller, ASC commands extensive knowledge on your industry. We take time to understand your business needs and suggest appropriate ERP solutions. Our experienced and expert cloud ERP team has successfully deployed 100’s of ERP software. We help you attain your ERP goals while controlling costs. We are full service providing need analysis, business and technology audits; on-time project management; flowcharting for process engineering and training and support. Our sole motto is your competitive advantage. We promise to be your trusted partner through the before-during-after lifecycle of your ERP solution implementation.
Please contact Jim Carroll: @ jcarroll@solutionsco.com; 310 508 9700; President Advanced Solutions & Consulting; Solana Beach, CA