The Value of ERP Software
Price objection is one of the biggest issues when it comes to companies committing to ERP Software. I’ve quite often delivered demonstrations to people who have been wowed by the software – less so by the price.
I thought it was time I put some context to the value of ERP software.
It’s an emotive subject….talking about people. You’re probably very grateful for your best employees; the ones who go over and above the call of duty, who deliver fantastic results for your company; the ones you’d be devastated to lose.
Think about that person in your business. The one you’d hate to lose. What is their role in the company? Is it your finance manager or sales director? Maybe the ops director?
Now think about how much you pay that person. The average salary in the UK is circa £26,500 so chances are it will be higher than that.
Now imagine that your best person was responsible for all of the following:
- Running all your business finances from procurement to billing and payment collection
- Closing your month end
- Keeping you compliant with tax regulations in the UK and abroad
- Delivering all your business KPIs and measurements
- Writing your budgets & forecasts and analyses variances on an ongoing basis
- Analysing all your data
- Managing all your inventory
- Managing your manufacturing/ecommerce/wholesale distribution/retail environment (delete as appropriate)
- Planning all your projects – including allocating the right resources and ensuring project profitability
- Managing your sales pipeline
- Executing your marketing campaigns and determining ROI
Someone who could deliver the above job description alone would be worth their weight in gold don’t you think? Now imagine they could also do the following:
- Keep your diary
- Help you manage your obligations from phone calls you need to make to tasks you need to complete
- Keep track of all correspondence between you and customers & staff
- Manage staff time and expenses
- Keep your HR records up to date
- Manage and recall all your documents
Even your very best employee would not assume responsibility for all of the above – regardless of salary or seniority.
Value of ERP Software
Of course, to caveat that statement, the price depends upon a number of factors such as, the size of your business, the number of users you require and the complexity of the solution. That said, I have never delivered a proposal to a customer where the annual price of ERP software has been more than the cost of a mid-level /low senior employee within that business.
To add to the context of the value, it is also worth considering the costs savings delivered to your business as a consequence of implementing ERP software. These can be any number of the following:
- Reduced IT and hardware costs (for cloud ERP)
- Improved efficiency
- Reduction in error through manual processing
- Elimination of duplication of effort
- Better decision making brought about by improved business intelligence
- Savings made from ending existing software, support and maintenance contracts
To talk to someone about how to leverage the value of ERP software like NetSuite or SAP ByD please get in touch.
Written by Emma Stewart – Sales & Marketing Director at Cofficient