So What Does an ERP System Really Cost?
By Johnny Nugent
Last week, we looked at the 5 most common ERP related questions. One of the questions we covered was, “what does an ERP system cost?” This was the hardest question to answer because so many factors go into it – so we decided to take a look at some of the elements that go into the overall cost of an ERP system.
This will vary greatly depending on whether you decide to host the software on premise (one time license fee) or in the cloud (monthly per user fee).
Adding on additional software such as mobile solutions, advance planning and scheduling, or business intelligence will increase the overall price.
The ERP vendor will include the implementation costs to get your system up and running, this will vary greatly based upon how many users, add-on modules, company dynamics, and overall ERP goals you have at your company.
For on premise systems, you will be required to pay a maintenance fee each year to get access to customer support and new versions of the software; for cloud users this is usually built into the price.
While many organizations can use the ERP system “out of the box”, some organizations require customizations that will be an added cost.
Ongoing Maintenance and Training
Your IT department will incur costs associated with maintaining the technology that the ERP solution is run on. Also, you may decide you need more ERP training after the initial implementation as business goals change.
Although these costs seem overwhelming when you list them all together, it is important to remember that not all of these costs are due on Day 1. They are simply costs to keep in mind when you are looking at the ERP investment as a whole.
It is also important to remember the goal of ERP investment. You will gain better visibility over your business allowing you to be more efficient and more accurate, make more informed and speedy business decisions, provide better customer service and better data security, and overall see a great return on investment.
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