When you are considering an Enterprise Resource Planning (ERP) project, one of the biggest deciding factors is ERP financing.
According to The Telegraph, 57% of U.K. SME decision-makers said cost is a barrier to adopting new technology.
The Manufacturers’ Outlook 2019, published by PLANT, found that 40% respondents said increased funding from governments would make innovation easier. Moreover, 35% said direct support for innovation through government grants would be beneficial.
As a manufacturer, implementing an ERP solution is an investment and one that, when done effectively, can have a high return rate. However, for many businesses an essential part of the pre-ERP conversation is determining how to fund it.
Igor Chigrin is a business funding expert at Fair Grant Writing and author of the book Get Funded! How to Find the Money to Successfully Grow Your Business and Solve its Most Pressing Challenges.
We spoke with Chigrin about options for Canadian manufacturers to access ERP funding through government grants.
Options for ERP Funding
In Canada, there are several ERP funding programs offered at different times during the year. Some of these programs include the Canada Job Grant, the SME in Action Program, the Canadian Agricultural Partnership, and more.
In general, Chigrin said it is best for businesses looking for ERP financing to evaluate which program is most suited to their organization.
Chigrin outlines the first step as checking which programs are currently available for funding. The best way to stay in-the-know is to keep in contact with a grant-writing partner, such as Fair Grant Writing, or an ERP consultant, like SHEA Global.
Second, check which of the programs are applicable for your industry specifically. For example, Chigrin noted there are ERP funding programs for the agricultural/food sector, the automotive sector, and more.
“If you are in that sector, your chances for success can be higher,” Chigrin said. “The reason for that is because there is way less competition for funding.”
Lastly, ensure your company qualifies for the program. For example, some funders require a minimum number of employees as a pre-qualifier. Others are location-specific.
The best way to confirm if you are eligible is to consult with a partner familiar with the grants.
Types of Funding Available
ERP project grants take many forms, with some geared towards training and job creation, and others encompassing the entire project, depending on the project scope.
Although you may be focused on funding relevant to your business needs, don’t discount training-specific funding. Employee onboarding is a vital part of the ERP implementation process and crucial to leveraging your investment.
The amount of funding also varies by project. In the best-case scenarios, ERP funding programs will pay for 50% of the costs, up to a maximum of $100,000, but those grants can be rare.
It’s also important to note that even when a business is approved for a grant, financial support is often not provided upfront, but rather upon completion.
“You have to still invest your money,” Chigrin said.
Preparing for the Application and Maximizing Chances of Success
Businesses applying for funding can maximize their chances of success by focusing on key outcomes of the ERP project and how it will improve their organization.
Ways to maximize chances include identifying organizational benefits such as:
- Priority sectors match
- Job creation
- Productivity improvement
- Revenue growth
- Research and development
Businesses also need to know the fundamentals of their proposed project before applying for ERP funding — including selecting your ERP solution.
“You don’t need to buy it or commit to it, but you should have a proposal from your vendor,” Chigrin said.
Besides that, businesses that wish to apply for funding need to have a timeline and a budget outlining what other financing sources are to be used.
This is where working with a value-added reseller, such as SHEA Global, is essential during the pre-application process. A value-added reseller is a firm that enhances the value of third-party software solutions by adding customized products or services for end-users. They can also provide additional project management help, including selecting the ERP system, planning a budget and timeline, implementation, onboarding and training, and more.
“In many cases we work with the [value-added resellers] because they usually propose the system,” Chigrin said.
After the Grant: Project Reporting
When you are awarded a grant, you are required to track deliverables, including financial reports, progress reports, and outcome reports.
“Collect receipts and proofs of payments to the ERP company,” Chigrin said. “Keep invoices.”
When it comes to grants including ERP training, businesses should also have a log to checkmark who attended. Final calculations depend on the attendance.
Selecting the Right ERP Solution
One of the biggest challenges businesses have when applying for ERP funding is selecting the right system.
“It’s critical to select the one that is right for their operations. I’ve seen it as the most significant issue,” Chigrin said.
“Even if they get a grant, two years down the road when the ERP system is in place, they might realize it wasn’t the right choice. I have had some clients like that.”
A value-added reseller (VAR), helps businesses evaluate their ERP options to ensure they are picking the right solution. A VAR will also create a budget, implementation plan, and timeline to maximize the chances of funding success.
For more information about Chigrin and Fair Grant Writing, please visit www.fairgrantwriting.ca.
Start planning your ERP project today. Regardless of location, SHEA Global can help identify ERP funding your business may be eligible for and plan the best project for your company.
Contact us to get started.