ERP software varies significantly from introductory inventory or accounting software (such as QuickBooks) in that it provides functionality across all business operations. This includes inventory management, accounting, order entry and processing, warehouse management, contact management, eCommerce integration, barcode scanning and more. If your business has become frustrated with managing multiple, standalone solutions, if you’re looking to start selling through new sales channels or have reached user and data limits within your existing system, it’s time to consider ERP software. However, it’s important to note that with this decision comes an increase in costs – and rightfully so. With more functionality, more automation, robust reporting and integration opportunities, the costs associated with using and setting up ERP are not comparable to QuickBooks and can vary significantly from one vendor to the next and from one company to the next. Most software systems include costs for software licenses and implementation costs.
The Cost of Implementation for ERP Software
Software implementation costs are the one-time fees associated with setting up a new software solution and typically include the cost of training employees on how to use the new software, the cost of moving data from any existing systems or spreadsheets into the new system (also known as data migration) and the cost of actually setting up the server environment and configuring the system for your specific company needs. Let’s take a closer look at how Blue Link ERP breaks down its software implementation service costs:
- Training
- Data Migration
- Customization
- Configuration/Installation
Training
Training costs tend to make up a significant portion of implementation costs. At Blue Link we estimate these numbers based mostly on users, however, other factors that can have an impact on costs. For example, training a large number of people at the same time tends to require more time and effort (for fielding questions etc.), and how quickly training goes will also depend on how familiar your team is with using software, and whether they can dedicate time to focus solely on training (as opposed to getting caught up with day-to-day tasks and pulled into other meetings). To make the training go as smoothly as possible, employees must have the time to dedicate to learning Blue Link without other distractions.
Data Migration
Data migration is the process of moving company data from your existing systems (accounting, inventory, eCommerce, and spreadsheets) into Blue Link ERP. At a minimum, you should consider migrating the following data:
- Customers with outstanding balances
- Outstanding AR balances
- Vendors
- AP balances
- Active inventory items
- Pricing information
- General ledger balances
- Opening entries
You can read more about Blue Link’s specific process for migrating data here, but essentially our team will review your existing data, extract it from existing systems and map it to the appropriate fields in Blue Link and then move the data into our system. However, the actual process is a bit more complex and this is where additional costs come into play. If your data is stored in multiple systems or multiple formats, or if your data needs to be cleaned up, this takes additional time and requires additional import procedures. For example, do you have a lot of duplicate customer records? Are you happy with existing product codes? Depending on your internal data entry processes and the restrictions of your current system, there may be a lot of areas for improvement with your existing data. Although this can take additional time and impact overall costs, it’s always best practice to start with good, clean data. Alternatively, for new companies with only a small amount of historical data, the migration process is simplified.
Considerations
Data migration quotes can vary by thousands of dollars because many software vendors low-ball quotes and ignore the massaging process and can sometimes put the onus on the customer to extract the data or manually enter it themselves. Although the data migration process may seem easy for individuals who have the skillset, even these people often face several issues such as the ones below:
- How do you update the data already migrated on the day you switch over “live” to the new system? How quickly can you get this done when doing it yourself?
- How do you get the opening balances, unpaid payables, uncollected receivables, etc. across at go-live?
- What if you want to change product codes, categories, etc.?
- Sales history and payment history – do you have the necessary skillset and knowledge to retrofit the old system’s extracted data so that it works and makes sense in the new system? Will you be able to reprint an invoice?
Having all important data migrated fully by the ERP vendor is always the best option and more often than not, any company that decides against this in the beginning quickly changes their mind as they start to work with the new system and realize the power of their data.
Customization
Major customization is typically identified during Blue Link’s consultative sales process and therefore built into the initial software costs. However, many customers will also identify new custom during the implementation based on existing processes and habits. In this situation, we strongly recommend that any custom requests get added to a Wish List for future review. This is because many existing processes can be improved or replaced with the implementation of the right ERP system and therefore these custom projects will quickly become obsolete. If necessary, this Wish List can then be revisited in the future.
Configuration/Installation
The last cost included with the ERP implementation process is for configuration and installation. Blue Link’s cloud-based software is hosted on our servers and each customer will have its own server environment configured for your specific company needs. Therefore, time is required by our IT team to provision this server environment and configure your version of Blue Link ERP. The time and costs associated with this step will depend on the complexity of your business processes, number of locations, number of business entities, sales structure etc.
Final Thoughts
As you can see, many variables impact software implementation costs. Because actual costs can vary so significantly from one company to the next, Blue Link always provides a wide range of cost estimates to account for all the different factors. These estimates act as a starting point and are based on historical data of companies of a similar size. Blue Link will then bill based on the actual time required for each activity mentioned above. This is also why it’s impossible (and even dangerous) to provide a set cost for a software implementation. We have designed our sales process to include an in-depth analysis of your operation so that as we learn more about your company during these discussions, we can provide a more granular and accurate range of costs. It’s important to dedicate the time and resources to a proper software implementation as it will have many positive benefits to your company down the road. Properly trained employees will be more confident completing tasks and taking advantage of the automation opportunities Blue Link ERP provides, clean data reduces the number of inventory, accounting and customer errors, helping with company financials and customer service and the right system configuration provides checks and balances to further automate your processes.
Learn more about Blue Link's Software Implementation Services
