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There’s nothing like a gamer-related national stock market story to get your kids interested in learning about the stock market. By happenstance, over the holidays, my son started to question how the whole thing works.

We spoke about the elements that make up the underpinnings of a company’s stock price – including future growth potential, economic factors and market psychology. My son decided to invest a small amount from his piggybank into the AMC movie theater chain – believing the company would significantly increase in value once things start returning to “normal.” Little did he know the short squeeze resulting in unprecedented market activity were only a few short weeks away. Now that he has more than quadrupled his investment, he’s become an advocate for the stock market and is educating his classmates on investing.

I occasionally correlate life to my passion for public sector ERP.  As I spoke with my son about the importance of understanding a company’s overall value, I couldn’t help but think about the many parallels to the importance of understanding the total cost of ownership for an ERP investment. No one could have predicted what happened to Gamestop or in this case, AMC. In contrast, there are multiple elements that play into an ERP purchasing decision and they are far more predictable than choosing a stock. Let’s first discuss the importance of your ERP’s total cost of ownership and then steps to better predict that you’ll achieve the lowest total cost of ownership. 

Now more than ever, the total cost of ownership and return on your ERP investment matters.

There are multiple ERP options and even more methods to select the right solution. Total cost of ownership (TCO) is an essential component of any investment and – with the pandemic and reduced public sector budgets – the TCO of your ERP purchase is more critical than ever. Similar to the concepts applied to assessing a stock’s valuation, there are multiple quantifiable and non-quantifiable elements to consider in determining your ERP’s total cost of ownership. Individuals can quantifiably compare and contrast SaaS fees, internal and external implementation costs, and on-going operational costs. Other non-quantifiable costs are more challenging to estimate, such as costs associated with critical changes (e.g., Federal Regulation impacts), continuous innovation costs, or opportunity costs.

Risk. It’s another core cost element that is difficult to measure prior to starting a project. By selecting a less mature, unproven solution, organizations increase their risk of project delays. That can be costly both in impact to employee morale and their ability to focus on other strategic initiatives. Additionally, there is the risk of identifying gaps in the solution even after go-live, further increasing costs.

The “STOCKS” approach to lowering your TCO

Let’s take a look at what I call the STOCKS approach (pun intended) to achieving the lowest TCO.

  1. SELECT the right fit. Technology designed for your current needs and factors in potential future needs (e.g., legislation, unions, grants, etc.) will lower your TCO. Without the right technology solution, organizations are forced to heavily customize their software, create costly workarounds, or buy niche solutions. All of this results in a less efficient and more expensive solution.  
  2. TEAM with industry experts. Public sector organizations need domain experts that understand their industry, including the unique challenges, requirements, and legislation. With this knowledge comes reduced risk, more efficient project management, and streamlined processes, decreasing TCO by reducing the probability of costly delays.
  3. OPTIMIZE your cloud investment. Selecting a cloud with managed services means you are optimizing your solution with a purpose-built infrastructure. By selecting one partner for both cloud and software services, you gain end-to-end accountability while lowering your total cost of ownership.
  4. CHOOSE the right innovation. Investing in a solution that continuously innovates is important, but it’s even more important to have the talent and resources in place to support maximum product utilization. Choosing a vendor that supports both aspects, innovative solution with resources to implement on client relevant innovations, will measurably increase ROI.
  5. KNOWLEDGE is power. An understanding of all aspects of your internal and external ERP costs, inclusive of SaaS fees, implementation, and on-going post-operational costs is essential when taking steps to lower your TCO. The right information at the right time is as important – such as knowing your implementation costs before you pick a solution being key to understanding total cost of ownership.
  6. SUCCESS! From an implementation and continuous improvement perspective - selecting a partner that is committed to your success reduces risk while delivering a better result. With your ERP purchase you will be joining a community and hence should not be treated as a commodity.  Without a committed partner, you will end up spending more to achieve sub-par results.

Ultimately, reducing costs enables you to focus your time, effort, and critical dollars on initiatives that impact your constituents. Choosing the right partner with strong domain experience that delivers a purpose-built solution and an optimized cloud leads to the best value and lowest total cost of ownership.

As for my son, while he’s not quite as excited about public sector ERP as I am, we’ve been having fun learning about the stock market together and watching his “portfolio” grow. But, neither one of us are retiring yet!   

Learn more about how CGI is transforming the user experience in state and local government with CGI Advantage®

About this author

Howard Dryver

Howard Dryver

Vice President

Howard Dryver has 22 years of experience within the state and local government solutions market. He has held management positions with CGI and American Management Systems. Howard has a diversified leadership background encompassing many aspects of information technology, including product management, product engineering, sales, marketing ...

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