Which Business Case Justifies Buying ERP?

You are currently viewing Which Business Case Justifies Buying ERP?

Making a purchasing decision to buy milk, it’s a simple formula:

Evaluation of need/purpose alignment + cost = purchase.

The ERP software industry is a different kettle of fish as it relies on services for much of its revenue and profits. 

As a consequence, software companies avoid offering self-implementation tools that would threaten this revenue stream. 

When companies apply the ‘buying milk’ formula for ERP solutions, it can regularly go wrong.

This is a deliberate sales tactic on behalf of the ERP software vendors.

Just for kicks, let’s look at some of the actual HIDDEN COSTS of ERP implementation.

The following is based on the actual results of thousands of ERP implementations over the years.

1.    ERP project costs = 5% of your company’s total revenue (Yikes).

2.    ERP project implementation costs = 5x your software license costs (Holy Smokes).

3.    Internal resources needed = 5 FTEs (full-time employees, YOUR employees!).

4.    Ongoing ERP vendor support is 22% of product/license cost ANNUALLY…. YES ANNUALLY!!

So, buying that bottle of milk never seemed so easy, did it?

I would love to hear from my network about their experiences and insights on ERP implementation.

Mark Walker

I help SMEs and large corporations, who’ve had enough of being fleeced by IT vendors forcing them to choose between expensive OEM warranties or premature upgrades. I partner with Australian and global businesses who want a partner they can trust based on values, ethics, integrity and rightful data ownership.