When deciding whether or not to implement a software solution, it’s essential to first make sure that your company can actually afford a new program. The cost of ERP software is a significant factor that leads some companies to go with a different type of solution, such as a standalone CRM or manufacturing program. Multiple factors affect an ERP cost, from users and deployment to implementation tactics.
What are the components of ERP cost
The number of users
You must estimate the number of users who will have initial access to the program. Many ERP vendors charge per user, which means that the more people who use it, the more expensive it becomes.
You must also consider the cost of adding new users to your system and how that cost may rise in the future as your company grows. You should check with the specific vendor you’re considering to see if they charge per user, especially if you have a large number of employees who will require access, as ERP software price can quickly add up.
Add-ons/Customization
Program add-ons, customizations, and configurations are not inexpensive. You must find a system that meets the majority, if not all, of your core needs out of the box.
Many ERP software companies provide integrations with third-party add-ons or the option to include specific modules for increased program functionality. The cost of these extra features varies depending on what you choose and which vendor you choose for your base package.
Strategy for Implementation
Depending on your internal employees’ technical expertise, you may decide to hire a consultant to help with your ERP implementation. Most vendors provide assistance, which may or may not include installation and employee training.
Some ERP programs list their preferred consultants who have the most experience assisting organizations in successfully implementing the software. Furthermore, some vendors provide more consultative.
If you are considering implementing ERP for the first time, you will most likely require more specialized technical assistance than a company that has previously deployed this type of program. In your ERP search, it is critical to determine whether vendor-provided assistance or a consulting service is best for your company.
Method of Deployment
The initial of deploying an on-premise ERP cost solution is higher than that of a cloud-based program. However, when you factor in fees for training, maintenance, and customization, the overall cost of these deployment methods balances out.
Both of these deployment methods have advantages and disadvantages, with upfront payment being one factor that makes cloud deployment more appealing to some businesses. But let’s say you’re more interested in an on-premise solution. In that case, keep in mind that, while the initial costs are higher, companies that use cloud ERP software end up paying roughly the same amount in the long run.
Customer Service/Training
When estimating the cost of an ERP solution and how well a program will work with your company’s needs, training and customer support are two critical components to consider.
Some vendors provide on-site training as well as online tutorial videos and classes. However, depending on the vendor, this assistance may be included in the overall price of the software.
Furthermore, more hands-on training options, such as having a specialist come to your location to help employees learn more about the program, are typically more expensive than receiving training through virtual self-paced courses.
Software Upgrades
As you develop your budget and ERP cost estimate, you must ensure that your program is constantly updated. Furthermore, the program requires upgrades that vendors may not include in the base software costs. Ask your vendor how often you need updates and if they added them to the ERP maintenance costs base.
How much does an ERP cost?
So, how much does an ERP system cost? As previously stated, ERP implementation costs are heavily influenced by a variety of factors. To provide a simple answer, we have created a short guide on how much you should spend on an ERP system, based on business size categories.
ERP Cost for Small Businesses
Low-end ERP solutions are typically sufficient to cover all processes for small businesses with up to 75 employees and annual revenues of up to $80 million. These tools is suitable erp system cost for small business anywhere from $25,000 to $100,000, depending on customizations, industry requirements, and the number of users.
Examples:
Odoo is an ERP platform that combines sales and project management tools into a single product. This is supplemented by features such as POS, MRP, and ecommerce, which allow businesses to manage all aspects of their operations.
Its inventory management feature works in tandem with its sales channel integrations to keep sales and inventory on the same page. However, what distinguishes the software as powerful is that users can access approximately 300 new applications per month.
Pricing is determined by module. Odoo is priced per module at $12 per user per month. What’s great is that you can customize your own plan by adding more apps of your choice as needed.
ERP Cost for Enterprise
Large businesses require enterprise-level ERP solutions. Businesses with more than 501 employees and a revenue of more than $250 million should be prepared to spend more than $1 million when purchasing a such system.
Examples:
Netsuite ERP is intended for growing, mid-sized, and enterprise businesses. It can automate almost any process, including revenue, order, inventory, and financial management, fixed assets, and billing.
These features enable the system to provide visibility into key performance reports and indicators to the entire organization. The platform combines financial management and business intelligence to enable users to make informed business decisions.
Pricing is based on the number of users, modules, and add-ons. NetSuite ERP pricing models are based on a quote. To obtain pricing information, you must contact the vendor directly. Enterprise plans, on the other hand, are priced according to the number of monthly users, modules, and add-ons.
So, with the above two prices for small and medium businesses, depending on your company’s budget and staff size, choose the most suitable ERP service provider for your company.
Conclusion
The cost of an ERP is determined by your company’s requirements. And, how well you plan for implementation. ERP costs are determined by factors such as the number of users, the method of deployment, and the level of training. As a result, when estimating how much it will cost your company, you must take these various factors into account.
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MonsterOdoo is a team of professional ERP consultants, project managers, designers, and developers with a wide range of experience in developing software solutions. Our aims are to help businesses across different sizes and industries to stay competitive and reach the highest growth with cutting-edge digital solutions.
