To protect yourself and your company from unpleasant surprises, cover all your bases by accounting for these 7 hidden costs in your CRM deployment budget.

1. Infrastructure
For on-premise implementations, “infrastructure” costs refer to the hardware required to run the application (including servers, desktop and laptop replacements, databases and other equipment and components). If your CRM deployment is on-demand (or cloud-based), which doesn’t require the purchase of in-house equipment, make sure your budget includes any additional cost for extra storage space, depending on your data requirements.

2. Customization
Even if the CRM solution offers the most robust out-of-the-box functionality for your industry, chances are you’ll need some customization to achieve your objectives, which impacts cost. What capabilities do you need added or tailored? Address these possibilities upfront, when you can plan for the costs and have better control over them, versus during mid-deployment.

3. Internal Human Resources
Calculate the opportunity costs of shifting employees (including executives) away from other potentially valuable tasks. Estimate hours required, with corresponding employee hourly rates, and factor those numbers in your budget.

4. Turnover
When a project team member leaves, either by being pulled to another initiative,  accepting another job offer, or whatever the reason, there’s a loss of knowledge that needs to be replaced. A new team member must ramp-up on the project, which takes time – and money.

5. On-going costs
Included here are expenses associated with system administration, new staff training, system upgrades and data management.

6. Data migration
How long will the system need to be down to perform the data migration, from legacy systems to the new CRM? What is the opportunity cost in terms of lost revenue and productivity during that disruption?

7. Training
How much training time is required to equip your employees to maximize the system? Keep in mind that the more difficult the software is to use, the more expensive it will be to get your employees up to speed on it. Consider also the cost of productivity loss by taking employees away from their core work to learn the new system.

To learn more about how to avoid being blindsided by these and other factors that lead to unpleasant, unexpected cost overruns with your next CRM deployment, click here for free downloads or contact ERT Group at 954-825-0888.

Michael Medipor is CEO of Enterprise Resources Technology Group, Inc. (ERT Group), a technology consulting firm that empowers companies to grow and succeed with business solutions that streamline processes, improve productivity, and squeeze more profit from operations. ERT Group is a Florida Microsoft Gold Certified Partner and a 2010 President’s Club member for Microsoft Dynamics – offering Microsoft Dynamics CRM and Microsoft Dynamics ERP. Contact ERT Group at 954-825-0888.

WHAT IS ON-DEMAND ERP?

On-demand ERP is business application software hosted by a third-party and delivered directly to end-users as a service via the Internet. Since there’s no software to install on your company’s servers or hard drives, as with on-premise ERP deployments, on-demand ERP eliminates the need for upfront investment in software licenses, databases, servers and backup equipment. Instead, you pay a monthly subscription for the capabilities and capacity you use (much like equipment leasing), calculated on a per user basis.

What are the advantages to on-demand ERP? What are its limitations? Is it right for your company?

ON-DEMAND ERP ADVANTAGES

Lower initial investment

With an online solution, you don’t need to purchase additional hardware or the entire software package upfront, which significantly lowers your initial costs. This levels the playing field for smaller organizations to tap the benefits of robust ERP functionality that was previously available only to larger companies with substantial IT budgets.

Quicker deployment – and return on investment (ROI)

Implementation takes weeks to complete instead of months, compared with on-premise solutions.

Seamless upgrades

With on-demand ERP, the provider continuously and unobtrusively adds the latest features and upgrades, which means that users can be assured that they’re actually using—rather than waiting for—the latest technology, without drawn-out upgrades, customization, and consulting costs.

Reduced dependence (and cost) on internal IT resources

Since the ERP provider assumes responsibility for configuring, upgrading and supporting the application, you avoid having to hire additional IT staff to manage the application and can redeploy your existing personnel to focus on more profitable tasks.

On-demand scalability, without downtime

Add or remove users as your business needs change, without having to purchase new equipment or servers. Increase or reduce functionality on the fly, without costly downtime, ensuring that your technology environment is continually up and running.

Predictable costs

The monthly subscription model enables you to control costs and eliminate surprises.

ON-DEMAND ERP LIMITATIONS

Despite these compelling advantages, however, on-demand ERP isn’t for every company. Here are three key limitations to consider.

Control

If having total control and ownership of the software, hardware and data is important to you, then on-premise (or on-site) deployment is the better option. (FYI: If you choose on-demand ERP, determine upfront who actually owns the data – you or the provider. This will save you time, money and headaches down the road should you decide to switch providers.)

Customization

On-demand ERP has certain limits on how much you’re able to customize. If your solution requires a high-degree of custom programming, on-demand deployment may not meet your requirements.

IT infrastructure

If you already have an on-site ERP solution that you’re looking to build upon or have invested heavily in servers, databases and staff to manage your technology, then continuing with on-premise deployment usually makes more financial sense.

IS ON-DEMAND ERP RIGHT FOR YOUR COMPANY?

Refer to this Deployment Options Matrix for a side-by-side comparison of on-demand, hosted and on-premise ERP deployments. For a recommendation specific to your company’s needs, contact ERT Group at 954-825-0888.

• Leads to costly delays and budget overruns;
• Presents difficulties for employees to learn and use the new system; and
• Fails to achieve overall business objectives.

The key to avoiding these issues is to select a technology partner with the knowledge, credentials and track record to ensure your project delivers results – and is completed on time, within budget, and without surprises.

What should you consider when evaluating a technology partner? What should you know before you sign the agreement? Here are 11 guidelines to steer you clear of trouble and put you on the path toward project success.

1. Expertise

Has the firm successfully designed and deployed projects similar to what you need done? Also what certifications has the firm earned? , For example, if the company is a Microsoft Partner, is it an elite-level firm, as denoted by “Gold” level status or “President’s Club”? These distinctions give you peace of mind that the vendor has a bona fide track record of implementing successful projects for clients.

2. Stability

How long has the company been in business? How many offices? How many employees? You’re making a long-term investment in new technology, so look for signs of stability that give you confidence this vendor will be around to support you for years to come.

3. Dependability

Ask for client references. Does this firm meet or exceed expectations? Do they meet delivery deadlines? When things do go wrong, how does the firm respond to get the project back on track? Bottom line, you want to know: Is this a firm you can bank on to make your project a success?

4. Product portfolio

What software products will they be installing to implement your project? What are the capabilities of that software? How easy or difficult will it be for employees to use the system once deployed? Is the software scalable, enabling you to add to it and grow in the future, without substantial system overhaul?

5. Vendor team credentials

Who exactly will the company assign to your project? What credentials does each team member hold? What level of experience does each member bring to the table?

6. Compatibility

How well do the project leaders interact with you and your team? Interview the project leads to get a feel for this upfront. If you have concerns before project launch, think twice about moving forward on the deal. Communication and compatibility issues rarely improve over time.

7. Delivery times

What are the milestones and delivery times? Are they realistic? Are they acceptable to you?

8. On-going support

What can you expect in terms of support after the project? What are the different levels of support plans offered by the vendor? Is there after-hours support? When? What response times will the vendor commit to achieve?

9. Terms

If you need to make changes to scope, what is the process? If the vendor does not produce deliverables on schedule or to your expectations, what remedies are available to you? Nail these points upfront to avoid unpleasant and expensive surprises.

10. Insurance

Is the vendor insured? What is their insurance coverage? What kind of data loss prevention and back up systems do they have in place?

11. Cost

What exactly is included in the project pricing? Is there anything important missing? Make sure there are no hidden costs in implementation, testing, training, connectivity, infrastructure, transition, and so forth. Do they provide multiple deployment options – e.g. on-premise or hosted; one-time license fee or monthly subscription – to strike the right balance between your requirements and budget?

When you invest the time upfront to ensure your vendor fits these 11 guidelines, you’ll save substantial time, money, and frustration down the road.