5 Cost Considerations when Investing in your ERP Solution

5 Cost Considerations when Investing in an ERP Solution

This post was previously published on 5 April 2013. For more up to date information on the PIC scheme and other budget initiatives, please refer to our most recent blog post on Singapore Budget updates, with the latest available information from IRAS. For the full details, visit the IRAS PIC site.

Like any other major investment for your business, the financial cost of an ERP has to be considered carefully. Even if all the benefits outweigh the risks, you’re confident the investment will pay off eventually and your business is ready for that next step, any successful business owner will still contemplate the financial investment over any other element.

This is no different when considering SAP Business One for your organisation. In fact, it’s often the first question asked by our clients; often immediately followed by enquiries about any ways in which we can reduce the cost and any support they might be eligible for.

So, we have consolidated some of the main elements of how the costs of implementing SAP are made up so that you can be more aware of ways to reduce your costs. We have also included some useful information for Singapore-based companies who might be eligible for government funding as well as financial assistance.


1. Location, location, location

Where will SAP be implemented for your organisation? Will it be used in just one location or multiple offices/branches? Do you have plans to open new offices needing SAP in the future?

Where you implement SAP will have significant impact on the cost. You can start small with a few users on the SAP Business One Starter Pack (fewer than 5 users) and then upgrade very easily when you grow. However, don’t limit the users purely because of financial concerns; if your staff can leverage SAP now, then ensure they are included in your forecasting for the first implementation phase.


2. Small Data, Big Problem?

Even small organisations generate massive amounts of data that needs to be transferred into their SAP platforms. The costs of your SAP implementation can be minimised if the data can be extracted, cleaned and validated in-house. Our consultants can guide you in this process, and carry out the work if necessary, but this will impact your investment.

[Read our Big Data post]


3. Get your Reporting Right

Reports can inflate the cost of your SAP implementation significantly. Before assuming that all your current reports will be needed in your SAP system, we can work with clients to assess their complete reporting needs in line with their business processes, and often reduce or eliminate their reporting needs.

[Read our Reports post]


4. Prioritise your Processes

With any SAP implementation, we work closely with our clients to understand their business processes and help them to identify more streamlined methods. If your organisation relies on industry-specific or strict operations, manufacturing or processing workflows, this can increase the consultancy time and cost, so where we can reduce or eliminate unnecessary processes, we will.

[Read our Operational Excellence post]


5. Coordinate the Change

Change comes with any new business system. Don’t underestimate how important change and project management is with your SAP implementation. Whether you have someone in-house or an external project/change consultant, this cost must be a considered factor in your overall costs. Falling into the trap of thinking it can be done part-time by you or one of your staff members can be a costly mistake.

[Read our Change Management post]

Whilst we completely understand these concerns, Blue Ocean Systems is able to work with clients to address them so that we can quickly move on to the most important part; how we can help you implement SAP swiftly and efficiently!


Have you heard of the PIC?

Singapore-based companies can leverage the full benefits of the Productivity and Innovation Credit (PIC) Bonus – up to $15,000 when they invest in SAP. Additionally, you could also qualify for the tax incentives offered by the Inland Revenue Authority of Singapore (IRAS) as ERP is included in the PIC Automation Equipment List – because it contributes significantly towards efficiency for industry.

[Read more about the PIC here]


Further Financial Support…

Blue Ocean Systems believes that organisations should not be hindered by financial restraints when they want to invest in SAP. We collaborate with a financial partner to ensure you can maximise your investment into SAP in the following ways:

  • Spreading your IT costs over the life of the SAP solution

  • Managing your cash-flow with predictable monthly/quarterly payment options

  • Favourably impacting your financial statements

  • Avoiding equipment disposal costs

  • Upgrading technology can be combined into your existing lease

We do this by:

  • Requesting a financing quote on your behalf

  • Coordinating the contract (once approved) which includes the period of financing and the proposed interest rate (between 3%-7% per annum).

Of course, there are certain criteria which you need to fulfil, e.g. in business for at least 5 years and willing to submit the financial statements (latest balance sheets and profit and loss data) for the past year for review.


[Read more about the financial assistance options available]


At our core, is helping clients to achieve their business goals and enjoy success; we understand the constraints on small and medium-sized enterprises can be significant. But we don’t believe this should prevent you from growing.


Contact the Blue Ocean Systems team of expert SAP consultants so we can help you to leverage the numerous benefits of SAP Business One.


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