When implementing cloud-based ERP Solutions companies are attracted to the cloud by several advantages that cloud / Software as a Service ERP offers:

• Predictable monthly investment in Software as a Service
• Cloud access – anywhere, anytime from any device
• World-class backup and security from global cloud providers of ERP solutions
• Scalability
• Quick ROI
• Easy upgrades
• New technology

The challenge for many small to medium-sized businesses is that ERP software needs to be implemented using a structured implementation methodology that involves:

• Project management
• User training
• System configuration
• User acceptance testing
• Scope of works
• Data conversion
• Go live assistance

Depending on functional requirements, the number of users and other related factors an ERP implementation for a small to medium-sized business takes 3-6 months of elapsed time including 20-80 consultancy days. Let’s provide a little more detailed analysis:

Small finance-only implementation of a cloud ERP solution usually takes 15-20 consultancy days over 2-3 elapsed / project months.

Small to medium-sized wholesale/distribution implementations of a cloud ERP solution usually takes 30-50 consultancy days over 3-4 elapsed / project months.

Small to medium-sized implementations of cloud ERP solution for a manufacturing company usually takes 60-80 consultancy days over 4-6 elapsed / project months.

The challenge for many small to medium-sized businesses is cash flow and the upfront investment required for consultancy and implementation services. At an average rate of +- $1,500 per consultancy day most ERP resellers will require a budget of $30,000 to $160,000 for implementation of ERP for a small to medium-sized business. The cash flow benefits of cloud solutions (monthly Software as a Service payments) are put under pressure by the upfront cash flow requirements of the implementation services.

One of the fantastic developments in cloud ERP solutions is that the advances in cloud technology have put enormous processing power in the hands of small to medium-sized businesses. Enterprise software (integrated finance, distribution, manufacturing, services) and modern technology (AI, IOT, mobility and e-commerce) are now available to small and medium-sized businesses through modern technology from ERP providers like SAP, Sage and MYOB.

If the barrier to entry is the upfront implementation costs to implement ERP then, let us get rid of that barrier by introducing Consultancy as a Service or Implementation as a Service for ERP.

The concept behind the Leverage Technologies Consultancy / Implementation as a Service is simple – get great implementation services, user training and ERP consultancy for SAP Business One, Sage Intacct, Sage X3 and MYOB Advanced and pay for these project implementation services as a monthly fee.

As an example – let’s assume your cloud ERP implementation is going to require a services budget of $120,000 for system configuration, user training, project management and data conversion etc. The project might run for 5 months from project kick-off to go live. Under normal ERP implementation guidelines, the $120,000 to implement ERP would be spread over the 5-month implementation and you pay each week/month for services consumed – usually based on weekly timesheets. Under the new Consultancy as a Service offering, you pay a monthly fee over an agreed timeframe. If the agreed timeframe is 24 months, the business pays $5,000 per month over the life of the ERP Consultancy as a Service timeframe. Simple, easy payments that help companies improve cash flow – through a spread of predictable monthly payments.

Consultancy as a Service is another great offering from the team at Leverage Technologies – looking to put modern, cloud ERP solutions in the hands of small to medium-sized businesses so that they can improve cash flow, achieve better customer service and help staff focus on strategic decision making.

Contact the ERP team at Leverage Technologies on 1300 045 046 to find out how implementing a new ERP solution could benefit your business.

Cloud ERP solutions are giving small to medium-sized companies access to digital transformation, technology and information that was previously reserved for large businesses with big IT budgets. Cloud ERP solutions have provided several benefits for smaller businesses:

• A “pay as you use” software license model (SaaS)
• Easy scalability to increase user count, user access and infrastructure as the business grows
• Access to world-class backup as required
• Access to new functionality and third-party integration as required

Cloud ERP solutions have made it easier to access data, scale business requirements and provide users with access to the latest technology – but what does it cost to implement cloud ERP solutions?

There are three main components to ERP cloud solution costs:

• Cloud software – user licences, cloud infrastructure that includes software, database, server, back-up etc.
• Implementation/services – the services required to implement your ERP cloud solution:
  • User training,
  • System configuration,
  • User acceptance testing,
  • Project management,
  • Data conversion,
  • Reporting / Analytics,
• Support – post-go-live support agreements based on a service level agreement

Cloud software licenses and infrastructure is usually available as a private cloud or public cloud solution. Pricing is often relatively straightforward – based on the number of users required and the license types (ERP vendors will often have different license types). Questions to ask your cloud ERP provider:

• Are user licenses named or concurrent?
• What access rights does each user have – what functionality can each user license access?
• Are cloud licenses payable annually or monthly
• Is the current per-user cloud pricing in place for a set period? If pricing is not locked in for a particular period, what maximum increases will apply?
• Can user licenses be increased and or decreased at any time – what are the rules associated with cloud license changes?
• When do the cloud license payments begin – at the date of order or, is there a “payment holiday” during your cloud ERP implementation period? Some cloud ERP providers will give you a 2-3 month cloud “payment holiday” during the implementation period when access to all users in the cloud is not yet required.

Implementation services – the consultancy process whereby a cloud ERP reseller provides services to implement the ERP solution. The services required to implement a cloud ERP solution will vary based on several factors:

• Complexity – how complex is the functionality that must be implemented
• Number of users
• Data conversion requirements
• Reporting/analytics expectations
• Number of companies / ABN’s to be implemented
• User acceptance testing and user training requirements
• 3^rd party solutions that must be integrated
• Development requirements

There are different implementation methodologies to choose from – do and charge, fixed price (based on a scope of works), agile etc. Questions that you will want to ask your Cloud ERP provider:

• How long will it take to implement the solution?
• Is the implementation cost calculated as a fixed price or estimate?
• What is the breakdown of the days to implement – how many days for each implementation task – user training, UAT, data conversion etc.?
• Is the Cloud ERP reseller working to a fixed scope of work?
• What are the resourcing requirements – for the ERP implementation partner and you, the customer?
• How will scope changes be managed?
• How will the implementation costs be invoiced – milestone, do and charge etc.?
• What resources are required to implement – consider both reseller resources and customer resources.

ERP implementation budgets can be difficult to estimate. This is because of the high number of factors that influence the price to implement ERP solutions. The broader the scope of the project – number of companies, functional requirements and the greater the development/integration requirements, the more complex the estimate to implement ERP. One of the challenges with cloud ERP budgets is that even if the software can be paid for monthly on a SaaS basis, there might still be a large upfront payment required for implementation services. This still creates a barrier to entry for smaller businesses that do not have the cash flow to pay for the upfront services. This has led to the concept of Consultancy as a Service (CaaS). CaaS allows smaller businesses to implement cloud ERP solutions without the need for an upfront implementation services budget – which can often run into tens or hundreds of thousands of dollars.

Cloud ERP software support is usually based on a monthly or annual support fee. At first glance, this appears easy to define. But not all ERP support agreements are created equal. Questions to ask your ERP provider:

• What is included/excluded from the ERP support agreement?
• What are the restrictions on the support agreement – number of calls per month/time per call/hours during which support is available?
• What are the process and pricing structure for after-hours support?
• Is there an annual increase in support fees?
• How does support pricing change when additional users or modules are added to the ERP solution?
• Are third-party, integrated solutions, covered by the standard support offering?
• What is the process to log and manage support calls?
• What is the support call escalation procedure?
• Define the SLA (Service Level Agreement)

Cloud ERP solutions provide a fantastic advancement in technology – bringing scalable technology and functionality to the small to medium business market. Run a comprehensive selection process with your ERP reseller/provider to make sure that you have a clear understanding of cloud, support and implementation costs.

The team at Leverage Technologies specialises in ERP solution implementations to achieve desired business outcomes for our customers. Get in touch with the friendly team on 1300 045 046 to find out more about ERP cloud costs and ROI.