For any enterprise, making the move to a cloud-based ERP platform (take SAP or Microsoft Dynamics ERP as examples) offers a number of benefits.
These include simplified account management, effective team collaboration, and ultimately greater sales. Research by Microsoft found that 61% of businesses said that moving to the cloud allowed deeper collaboration with business partners and 57% said that moving to the cloud early gave them a competitive advantage.
Despite the benefits, however, cloud-based software adoption is not without risks, including the challenge of budgeting with the cloud migration and software adoption will cost.

Identify as much as you can from the start
The first step in developing a budget for your transition to an ERP cloud solution is to identify all of the potential cost sources associated with this transition. The subscription costs to use SAP or Microsoft Dynamics ERP cloud software are an obvious one, but there are other technical costs associated with the move. You may need to purchase new hardware or install a new operating system to support these options. All of this needs to figure into your budget.
Strategize for efficient and impactful employee training
Besides the tech-associated costs, there are a number of human cost factors that you need to budget for as well. One of the biggest costs is employee training, in this case the process of demonstrating how to use the new software effectively. Training is wildly unpredictable, in terms of its overall duration, the potential need for retraining at later intervals once knowledge is forgotten or new features introduced into the software, as well as the overall related training costs (not to mention the costs of helpdesk support, which will likely rise when adopting a new software).
Yet effective and impactful training is essential to getting a good ROI. A good way to minimize costs in this area is to have a handful of employees become experts with SAP or Microsoft Dynamics ERP and have them teach their knowledge to the others. To teach in stages, that is. In general, you don’t want to give too much information in a short period of time, so a performance support solution (WalkMe is one example), which provides guidance to ERP users long after training ends, is recommendable as well.
Change is part of the game
It’s also important to budget for change management to ensure a high level of adoption. There will likely me initial resistance from both managers and team members when being faced with the challenge of learning an entirely unfamiliar software to them, and this can often results in prolonged onboarding and low adoption, and the costs included in that. Yet proper communication, follow-up and the opportunity to apply what they have learned quickly boosts confidence and acceptance.
Don’t underestimate data migration costs
Another important factor to consider is the cost of data migration. All of your accounts and other information will need to be transferred to the new ERP cloud solution, and that takes time and money. Don’t underestimate the costs of data transfer, as this is a crucial step in the move. You also need to keep things running during the migration stage, which means that you need to coordinate between your old and new systems during the transition.
While the three above categories account for most of the large cost factors for transitioning to the SAP or Microsoft Dynamics ERP cloud, it’s extremely important to also budget for miscellaneous and unexpected costs. Most of these may be small, but they can add up quickly to derail your budget. Make sure to account for every possible detail you can think of and incorporate a contingency fund into your budget as protection against unforeseen issues.
Plan for success
You also need to take the time to identify the factors that are critical to the success of your transition. These are the factors that absolutely cannot be allowed to fail. Prioritizing ahead of time will allow you to make critical decisions to ensure the success of these factors during the transition process that may ultimately save your project.
If you’re worried about managing your budget, there are great applications such as Solver’s BI360. They can also help you plan for the future with forecast analysis.
Careful planning is essential for a successful transition to cloud-based ERP software. The more meticulous you are in planning and in paying attention to every detail, the more seamless and successful your transition will be. By accounting for all possible factors and contingencies ahead of time, you’ll avoid unnecessary derailments and complete your transition without going over budget. Your business will then be able to start taking advantage of the many benefits that SAP or Microsoft Dynamics ERP has to offer.

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