The Cost of Doing Nothing
Whether you’re implementing a new ERP solution or upgrading to the latest version, doing so is often thought of as a big commitment. With new cloud ERP alternatives, the cost and effort required has been lowered in comparison to on-premise implementations. Nonetheless, many businesses decide to delay making the decision and stick to what they currently have. What they often forget, however, is the cost of doing nothing.
Aberdeen Group has done a report on the topic titled The Cost of Doing Nothing: Why You Can’t Afford to Sit on an ERP Software Decision. We will highlight some of the findings but encourage you to read the report for more information.
Avoiding the Decision
The first thing that needs to be addressed is why organizations decide on making no changes to their current setup. As you can see below, this question was asked with respondents being able to choose multiple answers. Nearly half said they were too small to require one. While it may be a fair case for a startup, ERP vendors have been expanding their solutions to provide ERP functionalities to smaller businesses that meets both their needs and budget.
A potentially more concerning reason people gave is the idea that they’ve been able to function effectively in the past and as a result expect that to continue in the foreseeable future. This ties to the previous point where fewer businesses truly are too small to afford or require an ERP solution. If organizations are suggesting they won’t be needing it, then they either don’t plan on growing in the short-term or are unaware of how the lack of an ERP solution is stunting their growth.
Vendors moving ERP to the cloud has created a whole new world of possibilities for smaller organizations. As a result of this shift, implementations have inherently become easier and cheaper. There is no need for infrastructure setup so much of the effort lies in training the staff. For the same reason, not only are costs reduced, but there is an interesting shift to how cloud ERP solutions are beginning to be packaged in terms of pricing, which we will speak to later. Hint: it’s more affordable.
Performing Better with the Latest Release
Whether it be delaying an implementation or an upgrade to the latest version, the report on the cost of doing nothing identifies a variety of metrics critical to business performance that are impacted. Always having the latest release allows you to quantifiably improve in several business areas:
- Finances — by reducing the number of days sales outstanding and improving the accuracy of financial reports.
- Customer Relationships — by improving on-time delivery and thus customer satisfaction.
- Operations — by increasing internal schedule compliance and inventory accuracy, leading to more efficient use of resources.
- Strategy — by having more information at your fingertips when it comes to making impactful business decisions.
The underlying reason these metrics improve with the latest ERP release is simple. Employees get the information they need to make informed decisions and act more efficiently due to their ability to capitalize on new best practices. Missing out on this opportunity to impact your bottom line is the real cost of doing nothing.
Deciding on Acumatica
There are several cloud ERP options out there, each with their own unique benefits. Still, this is a good opportunity to highlight Acumatica for a few reasons. As previously mentioned, ERP vendors have been expanding the functionality they provide. It’s no secret that every industry has specific challenges, which is why Acumatica has focused on filling those gaps with Commerce, Manufacturing, and Construction Editions in the last year.
What’s even more exciting is the change in their licensing model. Rather than charging based on the server size you need to meet your peak usage, one of their big announcements at the 2018 Summit was their transition towards flexible transaction-based pricing. Now, businesses with peak and slow seasons can scale their pricing to match their monthly requirements.
On a similar note, instead of the traditional implementation project with its front-loaded cost structure, partners, including yours truly, are starting to convert to a new way of doing business and getting rid of expensive change orders and scope creep. We are increasingly able to package implementation, licensing, support, ongoing training, managed services, and other value-added services like annual upgrades, process assistance, enhancements, and access to experts in a multi-year, fixed annual or monthly fee arrangement.
Lastly, Acumatica offers a cool and informative tool for you to compare the cost of implementing a new ERP system vs. the cost of doing nothing in just 5 simple questions. Of course, it uses some assumptions and may be a little oversimplified, but you can get a good sense of how they compare.
If you’d like a more detailed outline of what pricing and costs would look like in your specific situation, you can contact us and we would be happy see if upgrading or implementing a new ERP solution makes sense for you. In the meantime, you can dive further into The Cost of Doing Nothing and learn the challenges that typically stem from a lack of an updated ERP software and why others choose to replace their out-of-date version.