ERP Implementation Costs and the Impact on Your F&B Business
Over the years, businesses in the food & beverage sector have seen increasing challenges in terms of product quality, food safety, traceability, and compliance. This has also led to an increased adoption of food & beverage ERP solutions for proactive and insightful decision-making on complex issues related to food production, processing, packaging, logistics, and customer support. However, ensuring a successful ERP system implementation requires a significant commitment of time, cost, effort, and organizational resources. Hence, before finalizing an ERP solution, it is important to establish an economic case for your investment.
Read on to learn about the cost-benefit analysis of ERP systems in the food and beverage industry and its impact on your business.
Cost Factors for a Food & Beverage ERP Implementation
Any key business purchase entails a comparison of the capital and operational expenditure to the expected return on investment. If your projected ROI exceeds the Total Cost of Ownership (TCO), it would typically be a beneficial investment. However, determining the financial and business viability of a Food & Beverage ERP implementation requires a better understanding of two key aspects:
1. The typical costs involved in an ERP implementation:
- New System Acquisition: For the hardware, software, licenses, and other supporting infrastructure
- ERP Customizations: To ensure that the system supports your proven and established business processes, instead of your company having to make process modifications that work with the new system
- Testing and Upgrades: Cost of testing and extensions needed for improved functionality, as well as the cost of staff manhours that will go into technical system testing
- Data Migration: Not just for consolidating and transitioning the data to a new system, but also any additional costs incurred on disposal or retirement of the old system and its infrastructure.
- Other Costs: Cost of organizational change management initiatives, business process management initiatives, workforce reorganization, and ongoing support.
2. The cost of inaction in switching to a better ERP solution:
As a business owner or key decision-maker, you need to review the effectiveness of your existing Food & Beverage ERP system:
- Does it deliver time and labour savings?
- Is it financially viable for the next several years, or are you stuck with an on-premise ERP solution, which may be significantly costlier than a cloud-based one?
- Is it reducing operational costs and waste, and improving production and supply chain management efficiencies?
- Does it offer superior reporting capabilities and actionable, real-time data for quick decision-making?
- Can upgrades to the existing system give you near-similar features and functionality as moving to a new one, and what would be the cost for that?
Maximize ROI of ERP Implementation
Maximizing the benefits of ERP systems for your bottom line lies in choosing the correct ERP system for your business. Not only can you manage, comply, and grow your business more effectively, but you can also get solid support for complex global transactions, processes, and supply chain relationships. With its intelligent, flexible, and powerful features and functions, SAGE X3 can set you up for success in your organization’s digital transformation journey.
At Panni, we’ve worked with a diverse range of food & beverage businesses for end-to-end implementation of the innovative and versatile SAGE X3 Food & Beverage ERP solution. Need a cost-benefit analysis, an estimated cost of not switching to a better ERP, or both? Our knowledgeable and experienced professionals can help you build the key scenarios that enable the right ERP decisions for your Food & Beverage business.
After analyzing the ERP Cost-Benefit Analysis for your food and beverage business, boost your organization’s digital transformation journey with the feature-packed SAGE X3 food & beverage ERP solution. Get in touch with one of the experts at Panni to learn more. Get in touch