Posted by Indusa Admin on August 10, 2015 5:00 am
Organizations make huge capital investments in implementing state-of-the-art ERP systems to improve their business productivity and efficiency. However, the actual costs that enterprises incur are the ones associated with the Total Cost of Ownership (TCO). A rough estimate of all the direct and indirect costs along the various stages of the ERP lifecycle is essential for calculating time to value.
Large and midsize companies are looking to Microsoft as the appropriate choice for ERP, as opposed to others who may not offer clear product road maps or commitment to long-term innovation. While JD Edwards offers great functionality with enormous configuration capabilities, the deployment and maintenance of this outdated ERP system can result in extraordinary costs. Built on proprietary code, organizations using JD Edwards require extremely skilled and specialized resources. The highly customized code is often difficult to comprehend and implement, compelling organizations to deploy a niche pool of resources, leading to high implementation costs. The scarcity of native tools and manual implementation of patches and upgrades results in high complexity and poor maintainability of the system, causing higher annual maintenance costs.
Modern and future-ready ERP systems like Microsoft Dynamics AX offer broad functionality and include the latest applications with tools and state of the art architecture that are vital for thriving in the current business climate. Organizations that run Microsoft Dynamics AX incur 3 times lesser maintenance costs as compared to JD Edwards. According to Bill Masek, Director of IT at Zurn, “by using Microsoft Dynamics AX, we’ll save around $250,000 to $300,000 per year in ongoing IT expenses.” Additionally, Microsoft Dynamics AX offers higher flexibility and scalability, enabling organizations to achieve a lot more in a shorter period of time. By incorporating technology essentials like business intelligence and cloud, Microsoft Dynamics AX provides high-end business offerings and delivers functionally equivalent solutions that augment business efficiency. According to Gartner, at least 30 percent of service-centric companies will move the majority of their ERP applications to the cloud by 2018, suggesting the need for ERP systems to support and integrate current technologies.
The TCO of Microsoft Dynamics AX starts lower and stays lower, enabling organizations to achieve humongous cost benefits. The license cost is less, facilitating easy affordability. Also, the system can be implemented faster, enabling low implementation costs and faster time-to-benefit. Internal and annual maintenance costs are less, due to the presence of modern code and architecture that is easy to monitor and maintain.
With ERP systems like JD Edwards, the time and resources required to implement and maintain the system can overrun budgets and workplans, leading to elevated and unanticipated overheads. On the other hand, Microsoft Dynamics AX involves fewer implementation and maintenance costs, enabling enterprises to reach new customers and penetrate new markets with a reduced budget. By recognizing, managing, and optimizing the lifetime TCO for ERP, Microsoft Dynamics AX enables organizations to achieve the best ROI, and experience remarkable outcomes that act as key enablers for their flourishing business.
About the Author – Manoj Nair
Manoj Nair is a seasoned IT professional with over 12 years of experience in Software Consultancy, ERP Implementation, Testing, ISV Development & Client Management. He is a Senior Project Manager at Indusa and is responsible of managing various software programs through cross functional coordination.