Why Price Shouldn’t Be the Final Factor When Purchasing ERP Software

Why price shouldn't be the final factor when purchasing and ERP systemIn today’s cost-conscious environment, many companies are looking to save money. Nowhere is that more true than in the manufacturing sector, where a combination of decreased demand, increased wages and offshoring operations have diminished traditional, U.S.-based operations. Enterprise Resource Planning (ERP) systems come under fire in this environment, and those controlling the purse strings look at manufacturing ERP software pricing as a final decision-making point.

But that mindset is dangerous. Looking at manufacturing ERP pricing as the deal-breaker can have immense financial consequences for your organization. Remember the old adage, “You get what you pay for?” Low-cost systems abound, but if they’re not a good fit for your company, it’s a waste of time to implement a free ERP system.

Instead, decision-makers need to consult with everyone touched by the ERP system, from the IT department that will be supporting it to end users tracking orders. It’s important to set aside pricing for the time being and look carefully at how the current system is used and what the company actually needs.

For example, if the workers on the shop floor use the ERP system to track orders, implementing a free ERP system that does not have that functionality will be a waste of time. If the ERP system needs to comprehensively track products from raw materials to shipping a final order, a free or low-cost ERP system may not be able to provide that kind of tracking. It may be too basic and it may not be scalable to the organization. Sure, your company can try to implement it, but the lost productivity of your employees will cost you more than if you had just purchased a fully functional, comprehensive ERP solution in the first place.

To quote another old adage, “Buy well, buy once.” That adage was originally for consumers purchasing appliances or clothing, but it applies to ERP systems as well. What may seem like a great deal “off the shelf” (in this case, a free or very inexpensive ERP system) may in fact require more time and effort to tailor to your company’s needs. Choosing by manufacturing ERP pricing means that you will need to spend more time and money upgrading or customizing the system as your company grows.

When your company chooses an ERP system based on what its actual needs are, not the price of the system, you will see better results: faster delivery time, increased revenue and decreased time spent troubleshooting. Manufacturing ERP pricing should never be the deal-breaker, because a system that you buy based on your needs will ultimately save your company more money in the long run. It’s worth it to spend more now so that your employees can be more productive, increasing your bottom line.

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This article was written by
IQMS
Website: IQMS

For more than 25 years, IQMS has been designing and developing manufacturing ERP software for the repetitive, process and discrete industries. Today, IQMS provides a comprehensive real-time ERP software and MES solution to the automotive, medical, packaging, consumer goods and other manufacturing markets. The extended single-database enterprise software solution, EnterpriseIQ, offers a scalable system designed to grow with the client and complete business functionality, including accounting, quality control, supply chain, shop floor, CRM and eBusiness. With offices across North America, Europe and Asia, IQMS serves manufacturers around the world. For more information, please visit iqms.com.