Do you feel that your company is drowning in paper documentation and it’s time for a digital change? Looking for an IT system, but afraid you’ll fall into the trap of hidden costs? Rest assured, you are not alone. Many companies have gone down this road and, unfortunately, things haven’t always gone according to plan. That’s why today I’m going to tell you what to look out for to avoid unpleasant surprises. Here are a few areas where additional costs can lurk that can mess up a lot.
Automation sounds like a dream – the data pulls itself in, and you don’t have to manually enter every piece of information. But as in life, the reality is more complex. Implementing a system that automates data workflows can be expensive, especially when you have to integrate it with production machines, sensors or other equipment. What is often forgotten is that automation requires additional work in implementation, integration and maintenance.
On the other hand, a manual system – while simpler – requires employees to enter data manually, which is time-consuming and error-prone. Deciding which route to take depends on your needs and budget. Automation can reduce long-term operating costs and increase efficiency, but sometimes it’s worth considering simpler solutions that better fit the specifics of your business.
The main difference between the two approaches is cost and efficiency. Automation, despite higher initial costs, can yield significant savings over the long term. Manual systems require more work on the part of users, which means a greater risk of errors and additional expenses to correct them.
It’s also worth noting that the data may already be available in various systems, such as ERP, WMS or MES. If these are properly automated, you can save time and money that would otherwise have to be spent manually entering this information.
One of the biggest hidden costs of implementing an IT system is the server infrastructure. When we are talking about large companies, especially manufacturing companies, data must be stored securely and efficiently. In this context, it often turns out that one server is not enough. To ensure smooth operations and security, redundant solutions are needed – so that if one server fails, another can take over its functions.
Backups, cyber security and reporting performance are other aspects that add to the cost of implementation. If the system is to run smoothly, the servers must be properly configured and tailored to the company’s specific needs.
The cost of licenses can come as a surprise to many companies. We often focus on upfront costs, forgetting that implementing an IT system is not a one-time expense. Regular payments for upgrades, bug fixes or technical support can put a significant strain on the budget.
In addition, licensing restrictions, such as the number of users who can use the system simultaneously, can also increase costs. If your company has 300 employees and the system provides access for only a few users at a time, the cost of additional licenses can be significant.
System specification is the foundation of a successful implementation. If you don’t define your needs clearly and precisely, the system provider may offer something that only partially meets your expectations. This often leads to misunderstandings and additional costs when you suddenly find that the system doesn’t have the features that are crucial to you.
A well-developed specification should cover 80% of your company’s needs. Of course, not everything can always be predicted, but the more accurately you describe your requirements, the less likely you are to encounter unpleasant surprises during implementation.
When you are faced with choosing an IT system, the question often arises: choose a ready-made solution or a castomized system? Off-the-shelf modules are cheaper, faster to implement, but may not meet all the specific requirements of your business. Full castomization, on the other hand, gives you full control over functionality, but comes at a high cost.
The optimal solution is hybrid systems, which combine ready-made modules with customization. This gives you flexibility and the ability to castomize key functions, without having to build everything from scratch.
An IT system is not just software – you also need the right hardware to keep everything running smoothly. Implementing a system in production may require investment in touch panels, tablets and even new computers. It’s important to check what the minimum hardware requirements are for the system you choose, to avoid a situation where modern software doesn’t work on outdated devices.
It’s also worth paying attention to database licenses, such as SQL Standard, which may be necessary for large amounts of data. If you don’t take this into account at the planning stage, you may be surprised at the additional costs.
Even the best-planned IT system implementation can encounter unforeseen difficulties. That’s why it’s a good idea to leave yourself a margin in the budget to cover additional costs. Experts advise to always have a reserve of 20-30% of the total project budget.
Why is this so important? Because there can always be new requirements, changes in the project or other factors that make the originally anticipated costs go up. Financial security will help you avoid stress and problems during implementation.
Implementing an IT system is not just a task for the IT department. Depending on the scale of the project, you may need additional support from external consultants to help you through the process. If your internal team doesn’t have enough experience, the support of external specialists can be the key to success.
Such a solution involves additional costs, but avoids mistakes that could prove to be much more expensive in the long run than paying consultants.
Think that once the system is implemented, everything will work flawlessly and you don’t have to worry about anything anymore? Unfortunately, it’s not that simple. Any system, especially one that is crucial to the operation of a company, requires regular maintenance, and if it runs 24/7, you need to have a team to monitor it and diagnose problems on a regular basis.
You can opt for an in-house or external service, but in either case it will generate additional costs. It’s worth taking them into account already at the budget planning stage, so that you won’t be surprised later.
Implementing an IT system is an investment that can bring huge benefits to your company. But only if you understand from the beginning what costs you have to reckon with. Don’t be surprised! Be aware of all the hidden costs, from licenses to hardware to service support, and make a thorough plan. This will not only save you money, but also avoid problems that can affect the success of your project.
For more details, I invite you to visit my Digitalize.co.uk channel on YouTube, Spotify and Apple Podcasts platforms, where I regularly publish podcasts, and today another one appeared.
