Implementing an ERP System: Timeline and Cost

As an eCommerce brand, maintaining stability in this socioeconomic climate is no easy feat.

Businesses must leverage efficient tools to streamline operations, manage resources, and optimise for growth. Enterprise resource planning (ERP) systems are designed to integrate and manage core business processes and offer a centralised platform for seamless operations.

As an eCommerce business deciding whether to implement an ERP system, two critical factors should be considered: cost and timeframe. Understanding the various pricing options and expected timelines can significantly impact decision-making and ensure a successful ERP implementation.

Pricing Options for ERP Systems

Pricing for ERP systems varies greatly, ranging from modest investments to substantial expenditures. ‘How much does ERP cost’ is similar to the ‘how long is a piece of string’ conundrum. A rough estimate for an SME would be around £7000 per user, however, there are several different pricing options to consider:

1. On-Premise Solutions:
   • In traditional on-premise models, businesses purchase a license for the ERP software, hosting it on their internal IT infrastructure.
   • Costs typically include an upfront license fee, annual maintenance, support, and potential upgrade expenses.
   • While this model provides full control over data and systems, it often requires significant upfront investment and ongoing IT management.
2. Cloud-Based Solutions:
   • Cloud-based ERP solutions offer a subscription-based model, where businesses pay a monthly fee for access to the software hosted on external servers.
   • With no upfront license fees and reduced IT overhead, cloud-based ERP systems provide scalability and flexibility.
   • However, ongoing subscription costs may accumulate over time, and businesses must consider data security and vendor reliability.
3. Customisation and Integration:
   • Depending on business requirements, customisation and integration may incur additional costs.
   • Tailoring the ERP system to specific needs and integrating it with other software solutions can optimise functionality but may require investment in professional services.
4. Total Cost of Ownership (TCO):
   • Businesses must evaluate the total cost of ownership, considering factors such as company size, user count, customisation, training, and ongoing support.
   • Calculating the ROI on ERP investment helps justify expenses and aligns with long-term business objectives.

Implementing an ERP System: Expected Timeframe

Once implemented, an ERP system can have a beneficial impact on your eCommerce business in a very short amount of time. However, there is a level of patience that must be applied to the implementation process. Depending on the level of customisation, you can expect anywhere from 3-9 months for an ERP project rollout.

Here’s what to anticipate during the implementation process:

1. Scoping and Requirements Gathering:
   • The initial phase involves assessing business needs, defining requirements, and selecting the right ERP solution.
   • This stage lays the foundation for a successful implementation and typically takes one to two months to complete.
2. Customisation and Testing:
   • Customising the ERP system to align with specific business processes and conducting thorough testing are critical steps.
   • Depending on the complexity of customisation, this phase may span two to three months, ensuring a tailored solution.
3. Training and Rollout:
   • Training staff and gradually rolling out the ERP system across departments is crucial for adoption and smooth transition.
   • Plan for two to three months to complete training, deploy the solution in phases, and address any challenges or feedback.
4. Go-Live and Optimisation:
   • The final phase involves launching the ERP system, monitoring performance, and optimising workflows.
   • Allow for an additional two to three months to iron out any issues, measure results, and ensure the system’s effectiveness.

Implementing an ERP system is a strategic investment that can simplify your eCommerce operations, enhance productivity, and drive growth. By understanding the costs, timeframe, and various pricing options, businesses can consider their realistic ERP journey and ensure a successful implementation.

Interested in implementing an eCommerce ERP system for your business? Get in touch for more information.

Reference: https://channelx.world/2024/02/costs-and-timeframe-considerations-for-successfully-implementing-an-eerp-system/