Your cloud MRP software business case
Choosing to use an MRP system for the first time, or moving to a new system, isn't a small decision. From our point of view, knowing the business case is as important as the software's functions.
In this article I want to share with you some basic ideas to help you bring your business case together. If you have not created a business case before it is thankfully simple. In essence you are determining if the benefits outweigh the costs.
Whilst every business case is different, let me share with your some general pointers.
Let's start with the negative side of this equation.
The actual price of the software
This might be a monthly subscription payment. Or, this could be an annual payment. There may be separate support costs and implementation costs. Whatever the costs are, you need to be clear about it.
Other than the costs of training, there will be time taken by your team to learn the software. You need to estimate a figure for this. The easier to learn the software the less training you will need.
We've designed Fraction ERP to be as easy as possible to learn. We've stripped back lots of the complex functionality to make your life easier. You can view our support site; most of our clients self-onboard and are up and running (at a basic level) on day one.
Fraction ERP's support site allows for a quick start using the system
We all know that you rarely switch on a piece of software and you are a master. There will be some time, some upheaval, that you need to factor in.
Don't be too optimistic. The less 'big bang' the better, most of the time. Being able to step into your MRP system, one function at a time, can make the transition easier. It won't surprise you that we built Fraction ERP with this approach in mind.
Add up all your costs and make sure you have a good idea of what you are walking into.
Now, let us have a quick look at the many benefits a cloud MRP system can bring to you and your business.
Lower IT costs
With a cloud MRP system, you don't need a server. You don't need new PCs, you just need devices that have a web browser. If you have an existing server for and MRP / ERP system then you can drop this cost.
If you are double handling data, e.g. whiteboards and spreadsheets, you risk mistakes. MRP systems help to minimise data input and hence reduce mistakes. You can factor in a reduction (of some) of the cost of your production mistakes here.
Better use of staff time
MRP systems should help you to leverage your staff's time. For example, Fraction ERP's operations tracking feature can do this. Your production staff should spend less time tracking down orders on the shop floor.
They can then spend their time on higher level business activities. When you do this, you build the business and there should be a cash benefit to this.
As an additional note - Fraction ERP includes free shop floor data capture licenses when you take out a paid subscription. You can get your whole shop floor team recording time and tracking progress at no extra cost!
Fraction ERP's visual tracking screen
Increased production capacity
Using automation tools and better organisation can lead to increases in natural capacity. Improving the way that you operate should increase your productivity.
- Better planning.
- Better scheduling.
- Better information.
- Less wasted time.
- Fewer mistakes.
- Increased output.
Increased capacity should have a value on it, or your ability to lower your overtime costs.
Pulling this together
The above are by no means an exhaustive list. I wanted to get you thinking about what are your particular costs and benefits. Too many organisations aren't realistic about their costs. They underestimate what it will take to deploy a new software system. We're hopeful that Fraction ERP's transparent pricing helps with the journey.
On the opposite side, too often there is a lack of thought about capturing the benefits. It is only a real benefit if you generate more profit on the back of it. Less stress and happier customer are great by the way, but more profit is the primary goal. You can have a lot of perceived benefits but if they don't translate into higher profit they don't count!
So, benefits - costs = profit / loss.
That's it. If you want to discuss your business case with us then please get in touch via the contact us page.
If you think that Fraction ERP might be a good fit then click here to organise your demo and free trial. We offer a two week trial period to help you play and evaluate our software.
Finally, if you want some ideas on how to go about evaluating MRP / ERP software, download our free implementation guide. You can get your copy here and it will also help you get the most out of the system you choose (even if it isn't us!).