Companies go for ERP outsourcing because the cost of implementation requires huge resources and even after going through the unproductive phase of implementation, the companies face the risk of ERP failure. There can be a number of reasons for ERP failure such as loss of key IT professionals and system not delivering the required performance. To prevent the wastages on failure, companies are opting for outsourcing ERP. Outsourcing helps the company to hand over the project to a team of experts who do not interfere in the everyday work activities and it allows the company to carry out its work even during the implementation.
There are three different types of outsourcing: developer outsourcing or consultant outsourcing, and the third type is to get software on rent. Many companies go for outsourcing both developer and consultant. Some of the providers give software on rent instead of going for the long and delaying process of selection, buying, maintaining, customization and implementation.
There are many other benefits of outsourcing such as
Companies lack human resources to handle the new system: In case the company do not have efficient human resources to take care of the automated system, it can go for outsourcing because the companies get expert professionals through outsourcing who are aware of the technical and functional aspects of software and its architectures, whereas, if the companies takes its own employees and gives training - the employees may not be as efficient as the outsourced professional. Another disadvantage is that the training sessions require long unproductive hours of the employees.
Implementation requires expertise: There are a number of companies that go for a number of ERP packages but completely different types of software are working in various departments - which cannot be integrated and it delays a number of processes - extends working hours and extra human resources is needed to maintain it. To prevent such inconveniences the companies should go for experts - who can suggest ERP based on needs of the company instead of giving biased decisions.
Midsized companies prefer to go for outsourcing for up gradation: In the latest trends a number of small and midsized companies prefer to go for outsourced ERP because the experience of ERP implementation was not very encouraging. Some companies tried implementation with their half baked knowledge and a number of practices were followed by the companies but a failed implementation or the software which is not up to the needs is more like a burden which may not help the companies to get the needed ROI. In such cases outsourcing provides a solution where the company can depend on external team and just query about the profits.
Prevents wasteful expenses: The company can prevent its employees from getting distracted from the daily work as a team of expert handles the implementation. It prevents delays and wasteful expenses on software solution.
ERP no more unpredictable: ERP becomes predictable when it is handled by an external team as the experts are aware of the way the implementation is done and the outsourced team can be held for delays.