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ERP Evaluation: Are You Looking at Price or Value?

If you’ve ever bought land and had a home built from scratch, you know it’s not a simple handoff project. Choices have to be made from the outset that will dictate how you’re going to build that house.

The decision to hire a contractor to build the structure, hang the drywall, and install the plumbing and wiring is straightforward enough. What comes after that is an exercise in determining whether you’ll build on price or on value. Will this be a partial DYI project where you do all the trim work on the finishes, install the plugs and fixtures yourself, and so on? Or will you go ahead and pay for a complete house that contains everything you need to function and feel comfortable, with all the work done for you?

Buying and implementing an enterprise resource planning (ERP) system involves similar decision-making. Some cloud solutions offer an opportunity for cheap ERP, but you need to know upfront what you’re getting for the price in terms of value.

Just as your home is the nerve center for your life, an ERP system is a company’s nerve center, with all processes and information flowing through the system. Everything revolves around this platform, so the ERP solution needs to be reliable.

Read 'Why SAP Business ByDesign is a Better Value than Netsuite'.

Price and Value Decisions

When a business is first thinking about an ERP rollout, it can be tempting to just select the cheapest ERP and go with a cheap implementation of this system. There are so many choices available in this category that it can appear that low-cost solutions will do the job just as well as the more expensive options.

Maybe that was the best decision 15 years ago, when businesses with budget constraints had to choose between quality and value. Today’s market is totally different, though, and now small and midsize enterprises can afford a rock-solid ERP foundation if they do their homework. While the cost of SAP Business One and similar solutions might not always be the lowest, there’s more to selection than just price.

You Get What You Pay for with Cheap ERP

An ERP system can be complex for even those in the know. This can make it easy to lose sight of the actual value you should expect from the software. For example, a cheap implementation might let you connect with various third-party solutions, but are those the right connections for the actual business needs?

You might want to customize your ERP system for your business operations. As anyone who has built a house can attest, sometimes the more expensive options that come with everything upfront are less expensive over the long run. It’s the same with ERP: you might get initial savings by choosing the cheapest ERP solution, but the cost of developing and maintaining custom solutions might end up far exceeding what you would have paid for with the more expensive—and extensible—option.

It’s human nature to like shiny new things with lots of bells and whistles. The latest tech trends help satisfy those desires. When looking at ERP software, however, it may be a mistake to believe a cheap ERP and a cheap implementation will meet your organization’s needs now and in the future, especially when it lures you in with things like AI and the blockchain.

The truth is, many of these products don’t update as regularly as more expensive solutions do, leaving you less likely to adapt to technological changes in the market.

Ultimately, you are investing in software with the goal of achieving revenue growth. A strong ERP system will automate processes and ensure that you are collecting the data and analytics you need to prosper. Cheaper solutions may offer some of what you need, but the upside may not meet your expectations. Affordability matters, but you also need to weigh the opportunity cost.

Why Value Matters

This is why hundreds of thousands of businesses turn to SAP and Oracle—two huge companies that have served the ERP market for decades. These companies assure quality, and their solutions are delivered in consultation with their customers. A number of third-party developers and consultants, including Navigator Business Solutions, support these ERP systems.

Systems from SAP and Oracle come with a higher price tag, but remember the adage that you get what you pay for. Many other startups have flooded the market with cheaper ERP solutions, but can you trust that they’ll still be around in 10 years to help you grow?

When you’re making an investment in your business, quality and stability are critical.

Should It Come Down to Cents or Sense?

If you’re choosing among products that have similar functionality, the cheapest choice is the best one. But be sure the options you’re considering are truly comparable; if you’re not fully knowledgeable about ERP systems, it’s easy to make mistakes as you compare.

Similarly, if you’re looking to build or reinforce your own House of ERP, some form of DIY might be enticing if it means you can shave some dollars off the total cost. But will you be able to focus on the bigger picture if you’re bogged down by so many loose ends? And will the quality be the same?

The most successful businesses often spend more not just because they can afford it, but because they know the value they’re getting for their investment.

It’s important to look to your future needs. At Navigator Business Solutions, smaller startups that require the same functionality in an ERP system as larger businesses often turn to SAP Business One. The cost of SAP Business One just makes sense given the value.

The higher initial investment in a more robust ERP solution pays dividends right away, but where it matters most is performance in the long term. You get what you pay for, so ERP value matters more than price.

Navigator Business Solutions wants to be a valuable partner that can help make the strongest business decision for your needs, both today and in the future. We’re here for you. Contact us for guidance on how to make the right ERP selection for your company’s needs.

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