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(1)

www.blytheco.com

Presented by Blytheco

We will begin momentarily…

Presented by Blytheco

(2)

Welcome!

Today’s

 

Agenda

Introductions

How to Budget for Software Implementation Q&A

How

 

to

 

Participate

 

Today

Arrow = Open/close your panel Questions = Submit text questions Follow‐up email with video link

(3)

Introduction

Apryl Hanson

Senior Director, Customer and Partner Strategy, Blytheco San Francisco Bay Area

12 years of extensive business system and management 

consulting experience, specializing in sales, marketing, 

customer experience and process improvement. Broad industry experience including financial, 

manufacturing, entertainment, retail, software 

development, marketing automation, SaaS and 

wholesale/distribution.

Lover of shoes, food and dogs.

Audience

 

Poll…

How

 

Well

 

Does

 

Your

 

Company

 

Budget

 

for

 

Software?

We have a good handle on all the costs associated and are never surprised 

with budget overruns

We have a handle on the costs but sometimes have budget overruns

We have an idea what costs to include but are often surprised by the final  cost

We don’t really know what to include in the budget for software, and usually 

have budget overruns

We have no idea what to put in the budget for software, and our CFO has 

(4)

How

 

to

 

Budget

 

for

 

Software

 

Implementation

Apryl Hanson, Blytheco

How

 

to

 

Budget

 

for

 

Software

 

Implementation…

(5)

A study by Panorama Consulting showed 

that reasons for going over budget on 

ERP projects included:

Additional technology needed to be 

purchased to meet project goals – 16.7%

Project budget was unrealistic ‐16.7%

Project staffing was underestimated in 

the initial budget – 22.2%

Initial project scope was expanded – 44.4%

Why

 

Do

 

Projects

 

Go

 

Over

 

Budget?

(6)

Scope:

 

Key

 

to

 

Your

 

Software

 

Budget

It’s

 

vital

 

to

 

define

 

scope

 

of

 

the

 

project

 

before

 

you

 

can

 

know

 

how

 

much

 

it

 

will

 

cost

Do you want a Ferrari or a Ford Focus?

What functionality do you need?

What reporting do you need?

How many users?

What other software will you need (i.e., 

EDI, ecommerce, etc.)?

Each has different costs

On‐premise

Lower software cost, but consider: Hardware costs

Hardware maintenance costs 

(appropriate room, IT staff, etc.) Maintenance and upgrade fees Integration costs

Cloud

Lower hardware costs, but consider: Subscription costs

(7)

Software

 

Costs

• Licensing

• Consider # of users

• Add‐on software

• Maintenance fees

Hardware (On

premise)

• Server • IT Staff

Services

• Implementation • Data conversion • Integration • Customization • Training • Support • Data conversion • Data cleansing

What

 

Should

 

Your

 

Software

 

Budget

 

Include?

Plan

 

for

 

Growth

How long will your next system last?

You don’t want to have to change software again 

sooner than you need to

Cost Downtime

Most companies change their business software 

every 8 years on average

Early adopters will change every 5 years

Recession caused some companies to wait longer What’s right for your company depends on your 

growth rate

(8)

How

 

Much

 

Should

 

You

 

Expect

 

to

 

Spend?

What

 

Percentage

 

of

 

Revenue

 

Do

 

Companies

 

Spend

 

on

 

Software?

Small companies (Less than $50M) spend 6.9% of 

revenue on IT on average

Mid‐sized companies ($50M ‐$2B) spend 4.1% Larger companies (over $2B) spend 3.2%

* Manufacturing companies on average cost about 14% more than other 

industries and the average cost to revenue ratio is .3% higher than that of all 

industries due to the complexity of those additional requirements. 

How

 

Much

 

Should

 

You

 

Expect

 

to

 

Spend?

Keep

 

in

 

mind

 

that:

 

Implementation costs can run from 1‐1/2 to 2 

times the cost of the software, depending on 

your needs and customization

For cloud‐based software, the ongoing cost of 

the software could have a 1:1 ratio with 

implementation

For on‐premise software, the software itself 

may be a small percentage of the total 

(9)

Cheapest

 

Is

 

Not

 

Necessarily

 

Best

In

 

fact,

 

cheapest

 

is

 

usually

 

NOT

 

best

Good discovery = getting what you need Thorough discovery = no surprise costs

Study: 63% plus of manufacturing ERP 

implementations go over budget, with actual cost  exceeding expected cost by an average of over $3  million. 

Integration with other software often the cause

Complete discovery = smooth “go‐live”

Study: 51% of organizations experienced some sort of  material operational disruption at time of go‐live, such  as not being able to ship product or close the books. Of  those, approximately two out of three experienced a  disruption lasting one month or more.

Cheapest

 

Is

 

Not

 

Necessarily

 

Best

Make

 

Sure

 

You’re

 

Comparing

 

Apples

 

to

 

Apples

 

in

 

Proposals

 

You

 

Receive:

Customized system vs. “out of the box” Does it Include all of add‐ons you need?

Have you considered phasing to reduce 

up front costs?

Compare the hours allotted for training?

Include project management hours?

Calculate your own team’s responsibilities 

in the project and your level of  involvement.

(10)

Consider

 

Funding

 

Options

Is This the Right Time to Get What You Need? May need to wait a year to afford/justify  the system your company needs in the 

long term

Get it right rather than getting it right now

Consider your funding options as many 

companies can fund software + 

implementation and training for you

Why go through a software 

implementation twice in a short period?

Additional cost Downtime twice

Conclusion

Remember:

It’s

 

vital

 

to

 

scope

 

your

 

project

 

before

 

you

 

budget,

 

including

 

all

 

the

 

functionality

 

your

 

company

 

truly

 

needs

Conduct

 

thorough

 

discovery

 

to

 

uncover

 

what

 

your

 

company

 

requires

Consider

 

all

 

the

 

costs

 

involved,

 

not

 

just

 

software

Remember,

 

cheapest

 

is

 

not

 

usually

 

best

Get

 

it

 

right,

 

not

 

right

 

now

A

 

good

 

consulting

 

partner

 

will

 

help

 

you

 

build

 

the

 

right

 

budget

 

so

 

that

 

“go

live”

 

is

 

a

 

non

event

(11)

Please

 

type

 

your

 

questions

 

into

 

the

 

Questions

 

Pane

 

on

 

your

 

GoToMeeting

 

Dashboard.

Q

 

&

 

A

Get

 

a

 

free

 

2

hour

 

consultation

You

 

can

 

get

 

two

 

hours

 

with

 

Apryl!

 

Want

 

more

 

info?

 

Get

 

our

 

free

 

Project

 

Scope

 

Template

Questions?

 

949.583.9500,

 

x2500

 

or

 

solutions@blytheco.com

(12)

References

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