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According to ERP supplier Agresso, organisations continue to base their purchasing decisions largely on up-front costs. As a result they typically end up with a solution that fits perfectly at the time of purchase, but is very costly and frustrating to modify after implementation. The company has now published a TCC checklist.
"The frustration companies feel with their rigid business applications is fuelling the popularity of TCC as a purchasing criterion," said Brian Sommer, an analyst at TechVentive.
"Instead of measuring up-front costs, TCC looks at the costs involved with modifying an existing software installation. As it turns out, TCC is a far superior measure of an ERP solution's true cost of ownership than TCO," he said.
Agresso's TCC checklist
1. Reorganisation and restructuring
- Our organisation will likely change in structure in the future to accommodate market demands/drivers. What effort is required to change the existing management structure?
- How much effort does it take to implement a reorganisation whereby one department splits into two?
- What effort is required to review organisational changes within the finance system?
- What effort is required to allow project managers to track debtors, creditors, commitments, budgets and margins by individual projects when a decision to outsource has been made?
- What effort is required to track a project when the organisational structure changes?
2. Organisational evolution
- How much effort does it take to provide people evolving in their job?
- What effort is required to support the business when rolling out new products or services?
- What effort is required to add a new metric by which to slice and dice results or performance?
- What effort is required to start analysing pay costs to a lower level of detail than just overtime?
- How quickly is it possible to change from a multi-site implementation to a shared services implementation without disrupting the business?
3. Mergers and acquisitions
- What effort is required to migrate the merged/acquired organisation to the corporate business system?
- What effort is required to introduce a common reporting structure across multiple legal entities and regions?
- What effort is required to move to operating a single credit control department for the entire group?
4. Government reform and compliance
- If a new regulation is introduced, what effort is required to comply?
- What effort is required to ensure new and old reporting standards compare?
- What effort is required to report financial data alongside non-financial data?
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