Organizations today are eager to get the ball rolling on something new and innovative, umm simply stating – they need an idea that should stand out from the rest.
Achieving extraordinary business transformation through the implementation of an ERP solution isn’t a matter of luck. It requires careful planning and a commitment to the best practices of quality. To establish predictability and transparency in your project, whether you are intending to implement on-premise or cloud solutions, you need an insight about the ERP implementation cost.
If you are a manufacturer or a CXO of a manufacturing industry, Enterprise Resource Planning software solution is one of the key elements that has your back. This simply means ERP supports you in every aspect. ERP takes away the hassles and ensures that every departmental data is centralized at one place so that concerned employees can co-author it and access it on the fly.
But, before giving a thought about selecting a suitable ERP software, every business owner ponders upon the actual cost of the ERP implementation process. It is a subjective matter and depends on the comprehensive requirements and different variables of your business.
When implementing ERP solutions to drive business transformation, an organization must understand what it takes to complete the project successfully, whether the project is large or small, whether implemented on premise or in the cloud. The steering committees, project team members, and stakeholders should be aware about the critical elements affecting an ERP implementation cost.
The cost of ERP implementation relies on a variety of elements –
1. ERP licensing
Depends on what you choose! Do you want to buy a software license outright or is it okay to pay the monthly subscription for the ERP license?
ERP system is licensed for using. You don’t own it, you get it licensed. It may be for either the entire organization or a unit or number of people using it. Depending on the budget and requirements, the ERP license may be temporary or perpetual. Moreover, the maintenance agreement of the system is priced as a percentage out of the license.
2. Number of users and the size of the company
The cost of implementing an Enterprise Resource Planning software system greatly depends on the number of people who will be using it in the company. Less number of users means less licensing cost and vice versa. It also affects the training sessions to be given to the users and complexity of the business processes. In most of the cases, a minimum number of ERP users is five.
3. Type of industry
Depending on complexity and nature of business, the ERP cost is determined. How? For example, if you are a business owner who deals in discrete manufacturing, then you will require a different set of functionality, say – supply chain planning, production management, QC check etc.
Secondly, the core needs of an accounting firm will be budgets, finance and more. Hence, the prerequisites of every industry are different, so, you should take time to select the ERP to meet your specific business requirements and thereafter choose the path towards implementation.
4. Additional customizations, if any
Every business is unique and so is its nature. Implementation of ERP requires a massive amount of organizational change that can fit into the company’s silhouette. If the ERP system does not mirror your business processes in an appropriate manner, it is better to include a customized functionality.
According to a report, only 23% of the companies implement vanilla ERP with just a mere or say no customization done.
5. Infrastructure cost
Depending on the deployment option you choose, the infrastructure cost is anticipated. Say if you chose an on-premise implementation, it will include the server costs, backup, storage and the cost of IT systems. On the contrary, if you select on-cloud ERP implementation, their overall cost will be low as everything will be stored on the cloud, less IT employees are required and physical server cost will be eliminated.
Apart from these factors, recurrent cost also adds more from the overall ERP implementation cost. Recurrent costs vary from vendor to vendor. Some of the ERP vendors lower the initial cost but increases the renewal cost.
On an average, the renewal cost of ERP is 10% to 15% of the total software cost. Also, an additional fee may be charged for upgrades or other IT costs.
Bottom line –
Enterprise Resource Planning has become an integral part of an organization, whether big or small. If you are someone who is willing to invest in ERP for the first time or may be looking for a new software for your business, then OptiProERP with SAP Business One is a great option.
With a team of well-versed and experienced SAP developers, we have come up with state-of-the-art ERP modules that will drastically change the way your business works. To know more about the ERP cost and implementation methods, please visit us at https://www.optiproerp.com/in/erp-consulting-services/#ImplementationServicesMobile