How to Budget for Enterprise Risk Management Implementation?
Enterprise risk management software has seen increasing popularity in recent years and for good reason. Many business leaders seriously re-evaluated their company’s risk management strategy amidst the COVID-19 pandemic — an event that laid bare countless vulnerabilities and risk factors. Before the days of the COVID-19 pandemic, these risks, vulnerabilities, and threats were unrealized or under-appreciated. But the pandemic drove home the point that even well-established and thriving companies can rapidly fall down if the circumstances are right (or wrong, as the case may be.)
This newly-found appreciation for a company’s risk landscape has prompted business leaders to seek out risk management solutions, such as the development, implementation, and deployment of an enterprise risk management software platform. But as with all Digital Transformation projects, business leaders must develop a budget to ensure that the project scope aligns with the company’s financials. This is much easier said than done, of course, due to the many considerations that must be factored into the calculation.
What is Enterprise Risk Management Software Implementation?
Implementation is one of several phases of the software development process. The ERM implementation process involves — amongst other things — configuring the software platform and preparing it for roll-out on deployment day.
In some cases, an enterprise risk management software project may involve the customization and configuration of an existing default platform. In this scenario, the ERM software implementation is really where the process begins as the development team works to customize and personalize the platform so that it meets the organization’s needs and requirements.
In other cases, the ERM software may be developed from the ground up and in this situation, implementation is just one of several software development phases. It’s part of a much larger process.
Whether your development company is building a new enterprise risk management software platform from scratch or they’re custom-tailoring an existing default ERM platform, you’ll need to invest the time and effort into developing a budget.
What’s Involved in the ERM Software Implementation Process?
To create an accurate budget figure for enterprise risk management software implementation, it’s important that you understand what occurs during this phase of the development process. Each software company does things a little differently, but the following is representative of what’s typical for the implementation phase.
- Configuration – The platform will be configured and settings adjusted to suit the company’s exact needs and requirements. This accounts for a lion’s share of the pre-deployment work that occurs during the implementation phase.
- Customization – If your developer is custom-tailoring an existing default platform (rather than developing an entirely unique software platform from scratch), they’ll need to customize and personalize it to suit your organization and its needs.
- Integrations – Integrations must be established between the ERM platform and the organization’s other enterprise software platforms. Integrations will also be required for
- Performance Evaluation – Performance will be evaluated to verify that everything is working as expected. If issues are detected, the development team can swing into action by making modifications as needed.
- User Testing – In some cases, actual end users may be pulled in to perform additional testing during the implementation phase. Real users have unique insights and the ability to identify issues that may elude tech-savvy QA testers.
- User Training – Users are trained to drive high user adoption rates. Training ensures that staff are familiar with the software platform and ready to put it to good use when it’s rolled out on deployment day.
Enterprise Risk Management Software Implementation Budget Considerations
To develop an accurate enterprise risk management software implementation budget, you’ll need to consider a variety of factors and the costs associated with each one.
Development Company Costs
The largest and most notable expense associated with ERP implementation involves development costs. Your software development partner will typically base its pricing on how many man-hours will be required to complete the work. This is the first figure you’ll need to obtain in order to develop an ERM implementation budget.
Every software implementation and deployment initiative will affect a company’s operations to some degree. For instance, your ERM developers will be tinkering with third-party and enterprise software platforms as they establish integrations. This can interfere with everyday operations, hampering productivity to some degree. These interruptions are generally quite limited, but there is a financial impact that must be taken into consideration. Your development partner can provide useful insights on what degree of disruption is to be expected, allowing you to calculate the costs.
Staffing Budget Considerations
Enterprise risk management implementation affects your company’s staff in a few different ways. For instance, employees will need to be diverted away from their normal workflow to participate in training sessions. This training is extremely important because it will empower users to make the most of your new ERM software system. The same is true for user testing: it’s essential for success with your new ERM platform, but it means pulling staff away from their normal workflow.
When all is said and done, you must account for the actual cost of training and the cost of reduced productivity since you must pull people away from their typical work responsibilities. Alternatively, a company may opt to call in additional staff to cover the team members who are participating in training or end-user testing. Those personnel costs will need to be factored in as well.
With these figures in hand, you’ll have the data you need to budget for enterprise risk management software implementation.
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Additional Budget Considerations for Enterprise Risk Management Software
As you consider the financials for your enterprise risk management software platform, there are a few other considerations that must be addressed if you’re going to maximize your chances of success and your long-term ROI.
Firstly, there is the matter of maintenance and updates. The very nature of software — and technology in general — is dynamic and ever-changing. As such, you cannot simply create an ERM software system and leave it as-is, all the while expecting that the platform will continue to perform well indefinitely. Operating systems, integrated third-party platforms, integrated enterprise platforms, other software programs, and hardware all improve and change over time. These changes affect your ERM software platform and over time, incompatibilities arise, resulting in a decreasing ROI and performance drop-offs.
Regular maintenance is critical if you’re going to keep your ERM software operating at peak performance levels while driving a strong ROI on a long-term basis. And this says nothing of the ERM software updates that are required, such as establishing new integrations, adding new features, or refining existing ones.
It’s considered best practice to budget for around 20% to 25% of the initial software development costs to cover expenses associated with platform maintenance. Updates should be budgeted separately since they can vary dramatically in terms of scope, making these projects far less predictable when it comes to cost.
Finding the Right ERM Development Company for Your Project
To implement and deploy the best enterprise risk management software for your business, you need the right development team for the job. But technical expertise is just one factor to consider. You must have a good working dynamic, with lots of collaboration, strong communication, and a development strategy that takes a problem and solution approach.
At iTech, we believe it’s important to cultivate a collaborative relationship with every client as we develop innovative enterprise risk management solutions. Our talented tech team develops ERM software with low overhead costs, a user-friendly UI/UX, and the potential for a solid ROI. We work with clients in a wide array of different industries. We invite you to contact the iTech team today. Let’s start a dialogue on your company’s enterprise risk management strategy.