There’s a lot of emphasis placed on finding the right ERP system. While your choice of ERP is important, it’s not the only factor that ensures success for your business. You also need to make sure the system’s implemented properly and that starts with deciding whether it’s better to implement an ERP system in-house or outsource.
Ready to discover the pros and cons for both?
Taking your implementation in-house
So, this is where you’d assign the ERP implementation project (and all the associated tasks) to your internal team.
Pros of keeping it in-house
- You’re working with people who know your business the best. Plus, the people you’ve assigned to the project should be your best so it’s a winning formula, really
- In theory, it’s easier to arrange face-to-face conversations, chase project status and propel progress
- Your employees may be more driven to ensure the project succeeds as the business goals and their own goals are aligned. However, this does mean you’ll need to properly handle change management and get your team’s buy-in
- Your employees who have been assigned to the project have a chance at further personal and career development which can improve their morale
- When the project is complete, all the resources and knowledge stay in the business
Cons of keeping it in-house
- You need the right people on the project. If you haven’t got the manpower already, it means you need to recruit them. Then, because these new people don’t know your business, they need time to learn it which leads us onto the next point…
- Recruitment is expensive and time-consuming (finding, interviewing, waiting out notice periods and onboarding can take some time). And this is assuming no recruits fail to make the grade
- Top talent can be expensive which is something you’ll have to consider during your hiring process. If you already have the manpower, they may want a salary increase
- The time your employees spend on the project is time they’re not spending on other tasks. You will still need to back-fill the space they leave behind in their departments and recruit those people too
- You’re responsible for the project, from chasing and managing the team to its outcome. This is on top of your usual day-to-day tasks
- You may not know the software inside and out and could make implementation decision errors that require re-work. This can add time and costs to an already lengthy and complex project
Working with an implementation partner
Rather than relying on your internal team to implement your ERP system, you could outsource the honours. Let an external team of experts handle the ‘dirty work’.
Pros of outsourcing
- The best partners will be industry-aligned. So, when you work with one, you’re instantly gaining access to a team of people who are deeply experienced in implementations across a range of industries - including yours
- These experts will become part of your team, bringing their extensive knowledge of similar projects to the table
- The best partners will have conducted projects of a similar scale many times and have methodology that’s proven to work for your choice of ERP. As well as giving you peace of mind that your complex implementation is in good hands, your team gets time back to focus on other tasks. The right partner will even share their knowledge
- You don’t need to worry about project management taking up too much of your time. You’re still in control of the plan, from the direction to progress and other governance activities, but the partner will manage their individual deliverables
- Even after the system’s implemented, the best partners will support your ERP’s maintenance needs, from proactively monitoring the system 24/7 and quickly resolving issues before they become real problems. Again, this means more time back for your team and you don’t need to hire in-house specialists to work round-the-clock
Cons of outsourcing
- Because you’re working with a third party, they obviously won’t know the ins and outs of your business in the same way you do. But, the right partner will always take the time to understand your business before they start work. Plus, you’re still involved in the project
- Your team may not want to work with a third party. It’s understandable. This is where change management becomes really important. Make sure you get your team’s buy-in and that they still feel involved in some way throughout the project
- It’s potentially harder to arrange face-to-face conversations when you’re outsourcing. But, the right partner will keep you in the loop and work closely with your team so they’ll always have a say
- Partners will often have multiple clients and projects going on so their resources may not be available at short notice. However, the best partners will ensure you get the attention that you need
- Travel time and expenses can be higher than if you had an in-house team. But, an in-house project often requires more resources overall (recruitment costs, time etc) so this can balance out
Keeping ERP implementations in-house or outsourcing: Which is truly better?
To be honest, it depends on your business. Implementation projects require a lot of resources (both time and money) so if your business can support it and you’re either certain your internal teams are up to the challenge or you can find and hire accredited experts, keep it in-house.
However, many businesses (even ones on a global scale) don’t typically have the resources to support such a large project internally. For that reason, outsourcing is often a wiser choice.
Then comes the next decision. How do you narrow down your ERP implementation partner options? That’s why we created a guide to help you choose the best partner for your business. We’ve covered everything in this blog, plus the pros and cons of working with the vendor/software author and tips to help you choose your perfect partner.
Check it out by clicking the button below.