The pressure to be more competitive is constant. Organizations must battle hard for every percentage point of growth. Yet most organizations have untapped potential within their reach. IT optimization through ERP deployment improves the top and the bottom line of the P&L. In this webinar, Walter Merkas and Rene Theberge of Withum, explain how spending too little on Business Management Systems ends up costing much more than desired. Managing a business through an ERP is less costly than one may think. They cover the anticipated need, costs and benefits of Enterprise Resource Planning (ERP) software.

1. withum.com
Presented by:
Wally Merkas
Rene Theberge
ERP: When Paying Too Little Can Cost
You Too Much
WEBINAR

2. WithumSmith+Brown, PC | Certified Public Accountants and Consultants | BE IN A POSITION OF STRENGTH
BE IN A POSITION OF STRENGTH SM
2
Team Intro
Dedicated Cloud eccentric with over 20 years of experience with eliminating complexity from system
transformations. Extensive experience in business process outsourcing, organizational
transformation, IT and Sales management.
Areas of expertise are on premise, cloud or private cloud based and include technology assessments
and strategy, organizational readiness, technology roadmap strategy, organizational transitional
management, business system architect, business case development, business system/vendor
selection, project management.
Wally Merkas – Cloud Practice Leader
Cloud advocate way before Cloud was even called Cloud. Started ITcareer as a software analyst
and developer, creating a Cloud intranet in early 2000’s; part of the Gmail Beta test.
Areas of expertise are selection of Business Applications like ERP, CRM, HCM, process mapping,
requirements gathering and vendor evaluation
Rene Theberge – Cloud Business Manager

3. BE IN A POSITION OF STRENGTH | withum.com
Agenda
digital.withum.com
§ What is ERP?
§ ERP cost
§ Manual Process Spending
§ ERP Benefits

4. BE IN A POSITION OF STRENGTH | withum.com
Our Premise
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You are already spending your ERP money
…on manual processes, not on system

5. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting
§ Accounting Tracks Business Function
• Tracks finances
• Tracks transactions
• AR/AP/GL
§ ERP is More Holistic
• It starts with debits/credits
• It also has CRM, Procurement, Inventory
management, Human Capital,
Production, and more
Financials E-Commerce
Supply Chain
HR
WarehouseManufacturing
CRM
BI

6. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting
§ ERP Reflects Organizational Need
• Retail
• Manufacturing
• Wholesale/Distribution
• Professional services
• Customer Relationship Management
(CRM)
• Human Capital Management (HCM)

7. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting
§ Customer Relationship Manager
(CRM)
• Beyond contact management…
• Manage Opportunities
• Process Sales Order
• Generate Sales Forecast
Financials
HR
Supply
Chain
E-commerce
Warehouse
BI
CRM
Manufacturing
CRM

8. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting: Procurement
Financials
HR
Supply
Chain
E-commerce
BI
CRM
Manufacturing
Warehouse

9. BE IN A POSITION OF STRENGTH | withum.com
Warehouse Management System –WMS (Inventory)
Sales Order to shipping
Proactive inv. levels
Automated replenishing
Purchase Order tracking
§ Supply Chain
• Automated procurement
• Minimum threshold management
• Optimizing stocks
Financials
HR
E-Commerce
Warehouse
BI
CRM
Manufacturing
Supply
Chain

10. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting: HR
§ Human Capital Management
• Payroll/Compensation
• Performance
• Succession Planning
• Job posting and candidate tracking
Financials
Supply
Chain
E-Commerce
Warehouse
BI
CRM
Manufacturing
HR

11. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting: E-Commerce
digital.withum.com
§ Ecommerce
• B2C - cart and checkout
• B2B - self serve portals Financials
HR
Supply
Chain
Warehouse
BI
CRM
Manufacturing
E-Commerce

12. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting: Making Things
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§ Production
• Track BOM
• Schedule production
• Track raw material
• Demand Management
Financials
HR
Supply
Chain
E-
Commerce
Warehouse
BI
CRM
Manufacturing

13. BE IN A POSITION OF STRENGTH | withum.com
ERP vs. Accounting: Know What’s Going On
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Business Intelligence (BI)
• Reports performance
• Reports KPI
• Cross functional data

14. BE IN A POSITION OF STRENGTH | withum.com
ERP: The Sweet Suite
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§ Full integration of business function
Quote
Sales
Order
Pick, Pack,
Ship
Invoice
Payment
Received

15. WithumSmith+Brown, PC | BE IN A POSITION OF STRENGTH
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Cost of ERP

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Cost of ERP
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Costs vary according to Business size
Small
0-100 FTE
0-$15M
1-2% Rev.
Mid
100-1000 FTE
$15-150M
2-6 % Rev.
Enterprise
100-1000 FTE
$150M ++
2-3% Rev.

17. BE IN A POSITION OF STRENGTH | withum.com
Cost of ERP- Where is the Cost?
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§ Cloud
• Licensing (annual)
• Implementation
• Ratio 1:1.5 (license to services)
• $1 license-> $1.50 services
§ On Premise
• Licensing (one time)
• Annual Maintenance (17-25%)
• Hardware purchase/upgrades
• Implementation
• Ratio 1:1.5 (license to services)
• $1 license-> $1.50 services

18. BE IN A POSITION OF STRENGTH | withum.com
Where Do Most Organization Spend Money?
digital.withum.com
§ Assumptions:
• Fully Loaded FTE (Full Time Equivalent) $67,100
• Average Revenue per employee - $143K/yr
• Time to enter data from one system to another – 4 minutes
• Copy data, file paper copies, sends to next step
§ Example
• Organization grosses $20M with about 90 FTE
• Organization processes 80 orders per week with an average of $4,800 per sale
• Quotes and Sales generated from Salesforce.com invoicing in QB

19. BE IN A POSITION OF STRENGTH | withum.com
Where Do Most Organization Spend Money?
digital.withum.com
* https://www.apqc.org/benchmarking-portal/osb/sales-and-order-management
General Information
Revenues $20M
FTE 100
FTE
Loaded
cost
$50K
Hourly
FTE cost
$25
#
Sales/wk
80
Fist
Quote
Processing
Sales Order
Sales Order
to
Shipping
(Warehouse
Management
System)
Shipping
to
Invoice
(QuickBoo
ks)
Payment
Received
(QB)
Cost per
transaction
$0 $24.21* ?? ?? 0
Cost X Trx
(180)
$1,936 -- -- 0
Annual Cost $100,700 -- ---

20. BE IN A POSITION OF STRENGTH | withum.com
Where Do Most Organizations Spend Money?
digital.withum.com
§ Conclusion example
• $100K/year spent just on moving data
• One FTE, just to process orders – a function automated in ERP
• Every system added (warehouse management, e-commerce, manufacturing
requirement planning) in this model adds. thousands of dollars yearly.
• Add current systems licensing costs
• QB- $600/yr
• SFDC -$7K/yr
§ Total cost of system $107K/year, or close to 1% of revenues…just to process
Sales Orders

21. BE IN A POSITION OF STRENGTH | withum.com
ERP Benefits
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§ Integrated Transactions
• No manual process
§ More time to sell
§ Manage inventory and stock levels as Sales
Order are committed
§ Single view of Lead-to-Cash
§ Single view of Procure-to-Pay
§ Single dashboard for all operations
Financials
CRM
Supply
Chain
E-commerce
Manufacturing
BI

22. BE IN A POSITION OF STRENGTH | withum.com
Our Premise
digital.withum.com
§ You are already spending your ERP money
• …on manual processes, not on the system
§ If you are close to the example, you waste $100K per year!
§ A Suite ERP will:
• Put you in a position to waste less
• Allow your organization to sell more
• Increase the top and the bottom line of your P&L statements

23. Q&A

24. BE IN A POSITION OF STRENGTH | withum.com
Next Steps
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makes sense for your organization.
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