“How much does it cost to implement an ERP system?” – This is a significant consideration that prompts some businesses to choose an alternative type of solution.
Here are two things to remember before you get the answer:
- The price will depend on the type of ERP system you choose
- There are more than 5 factors to affect the ERP implement cost
Will be summarized in detail in Eximias‘ article.
What is an ERP System?
The best way to describe an ERP system is a deployment that integrates common databases to give a comprehensive view of the essential operations in your business. It can exist in many forms: from a single system, a group of interconnected or disconnected systems, to simple spreadsheets.
Based on the idea of centralized data collection for widespread use, ERP solutions merge the chaos of several unintegrated databases, thus providing transparency from the CEO to the accounts payable clerk.
The data they are accessing is accurate, unified, and coherent. For any ERP operation, data integrity is requisite, from quarterly financial statements to ad hoc reporting on outstanding receivables balances.
ERP systems reduce data duplication and ensure data integrity. It aggregates common transactional data from various sources. One database and one set of data structures are prevalent in ERP systems.
By combining business processes and technology, the definitions and user experiences of all data used inside an organization will be consistent. Put another way. It explains how people and technology in the banking industry can communicate accurate data and work together.
It also defines a set of business data components; as a result, ERP implementation makes business processes more accessible, more efficient, and more standardized.
Undoubtedly the above definition has helped you understand somewhat about the ERP system. Before answering the question “How much does it cost to implement an ERP system?”, Eximias will guide you through some tips to choose the right ERP system for your business in the next section.
5 Tips for Your Business to Choose a Suitable ERP System
When looking for a unit that provides and develops ERP systems to get the answer for “How much does it cost to implement an ERP system?”, you have to answer a series of headache questions first. Let Eximas give you a hand in finding the right ERP system provider through the tips below:
- Focus on vital business needs
First, this is the first piece of information that Eximias give you. So, keep in mind that it depends on your business work culture to decide which software system is most suitable. It will be very time-consuming if your business is forced to change too many working habits and affect the quality of current work.
Remember to narrow down the list of potential software providers. Plus, make sure their software needs to have features and services that match the needs of the business.
“How much does it cost to implement an ERP system?” If you’re a small business and don’t have a lot of money for this, make the extra cost consideration a priority. It’s best to list up to 3 potential suppliers, so you don’t have to overwhelm this issue and affect many other tasks.
- Reassurance and increased production
Investing in ERP systems, organizations expect increased production, efficiency, and cost savings. The opposite may happen if a system is unable to adapt to changes in technology.
An ERP system is a dynamic structure and must be treated to prevent this kind of occurrence.
As your firm expands, you need to develop your system as well. It’s essential to look for an ERP system that can be modified and extended. Also, a system that allows you to make modifications relevant to your sector might provide further benefits.
- Establish the demo version
Only you and the people who will use it will know if a resource planning software solution is right for you. Whether it’s software installed on your computer or a web app, they will give you a demo version to try it first hand.
More and more ERP solutions are on the market, especially those based on cloud technology. They provide users with free-trial packages before deciding whether to pay for this technology solution or not.
This is an opportunity for your business to check the efficiency of the software. During the free-trial period, you and your colleagues need to use all the necessary features, synthesize and check the existing functions and at the same time write down the pros, cons, and features that need to be added for selected ERP software.
- Software budget
Making a wish list, limiting the list of software providers will help you make suitable choices, but the most crucial factor is the ability of the business to pay for the software.
A spending plan for your money is essential to budgeting since it assures there will always be enough money for the things you need and those critical for your projects. Additionally, sticking to a spending plan can help you avoid getting into further financial trouble, which will allow you to take on more ambitious goals in the future.
- The reputation of ERP system provider
There are several factors to consider when choosing an ERP system, including the reputation of the ERP software provider. Ensure that the company has a solid reputation for quality and reliability.
You can look at the customer reviews to see what they said about the product you are heading to buy. In the case of an ERP supplier, a utility firm can look for evaluations to see whether they have the utilities sector understanding and experience to assist the business prosper. In this instance, retail supply chain management providers may not be the ideal choice.
Handy tips, right? Moreover, the next part, certainly the essential part so that readers can find the most suitable answer to the question “How much does it cost to implement an ERP system?”. Find out now.
How Much Does It Cost to Implement an ERP System?
It is difficult to have an exact answer to the question “How much does it cost to implement an ERP system?” because advanced technology is born continuously, making product prices also change from time to time.
In addition, the price of an ERP system depends on many factors such as the number of users, the size of the business, additional features, etc. As of this year, the average ERP project budget per user is $7,200. Depending on how many users in the ERP deployment may cost around from $150,000 to $750,000.
“How much does it cost to implement an ERP system?”- MarketsandMarkets forecasts estimated the worldwide cloud ERP market to increase from USD 45.3 billion in 2020 to USD 101.1 billion by 2025. The impact of the pandemic is the primary factor driving cloud ERP’s growth.
Consider your company’s specific demands while finding the answer for “How much does it cost to implement an ERP system?” since this is a broad range of possibilities. Here, we’ll go through how to build a budget for an ERP system according to your company’s needs and the typical price of an ERP software.
Type of ERP system:
Before getting an answer to the question “How much does it cost to implement an ERP system?” you need to know there are two types of ERP systems now on the market: Perpetual license, subscription plans. Each type has its unique characteristics, as follows:
- Perpetual licensing – The perpetual license type has existed in the market for a long time. You will receive your host servers, a license to use the software , and receive technical support for six months to 3 years. Technical support time will depend on the customer care package you have selected.
After the technical support period expires, you need to pay more to receive this support from the software provider. Your budget will be proportional to the number of users and the size of the business.
- Subscription plans – The subscription plan is a form of software developed in recent times, called Saas. This type of software is a web app and chooses a third-party cloud storage system to do the data storage. You can only “rent” on a 1-month, 3-month, or more, depending on the needs of the business.
Depending on the type of software that will affect the reader’s correct answer to “How much does it cost to implement an ERP system?”. Specifically, what factors change the price answer of an ERP system, find out below.
What Are The Basic ERP System Costs You Should Consider?
- Hardware – The first and the most crucial thing you have to consider to install an ERP system is hardware. It could be a PC or laptop. But, if you choose the perpetual licensing type, we recommend using a PC to build up your server. In contrast, the subscription plans do not need a powerful hardware system to operate the ERP system. But you still need hardware systems to access the web app. This will affect the answer”How much does it cost to implement an ERP system?”.
- Customization – Whether perpetual type or subscription type, you still need some customization to suit your specific processes. Customization features would make the cost up a little bit from the original one. You have to keep in mind the budget for the question “How much does it cost to implement an ERP system?”.
- Consultants – If you have nothing about ERP software, you will need the consultants to give the most appropriate advice for your business to not waste much time on this.
- IT staff –ERP system is a complex system if put into operation at the enterprise. During the operation period, system failures will affect the quality of work. The IT team is an urgent consideration to overcome the unfortunate consequences if the system fails.
- Maintenance and upgrading – This is a necessary expense for businesses to avoid unfortunate events. With maintenance policies, the development team will test, patch, change features and update new technologies into the system you are using. However, maintenance and upgrades are included with subscription plans.
How much does it cost to implement an ERP system? – Between $75,000 and $750,000 is the price range for small and medium-sized enterprises to adopt. If you choose the perpetual licensing type, the costs for significant enterprises might go from $1 million to $10 million.
Omit subscription plans with a more affordable price, depending on the requirements, desires, number of users, and business size, with flexible pricing for each package.
If you have no idea about the ERP system or the suitable type of ERP software for your business or have not got the answer for “How much does it cost to implement an ERP system?”. Do not hesitate to contact the professional in this field to receive the consulting meeting.
An ERP system is a complex software structure that can help businesses control existing resources and predict business performance through monitored and updated data. Based on these benefits, many companies have chosen the ERP system as a powerful tool to solve difficulties in business management.
To choose the right ERP solution provider, you need to answer a series of questions such as “What system features are necessary for the business to function well are” “how the software benefits your business” “How much does it cost to implement an ERP system?”.
Enterprises can only find a satisfactory supplier that determines the business needs, the working culture, and payment ability for the software.
Purchasing a new ERP system is a significant corporate expenditure. As with any investment, it may be beneficial to engage with independent advisors to determine whether a new ERP approach is suitable. If so, which ERP system will best match your goals and aid you in keeping the new ERP system on track.
Eximias consultants examine how organizations and their workers use their software to enhance the existing infrastructure, integrate new technologies, and execute essential changes.
Our teams are well-versed in the issues surrounding digital transformation. We offer creative ideas and solutions to help you survive the competition and make your staff’s jobs easier. If you are seeking for more interesting information, have a look at Eximias’ blog page.
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