How to Determine ERP Pricing
When it comes to looking into how to determine ERP pricing, there are four main factors you need to consider. However, just like all businesses are different, all ERP software solutions are also have slight variation. Therefore, so are the pricing systems. Instead of giving you an estimated cost (which can be up to $20,000 per year per person), we have pointed out what factors you need to consider when arriving at your magic budget number.
ERP Pricing Factor 1: The Software
First is the actual ERP software. When looking at how to determine ERP pricing with the software, you will need to consider the size of your company. How many end users will be using the system and how many ERP modules will you need? The complexity of the software factors into the overall cost of the ERP software. The ERP systems may also be discounted if you are a larger company. A mid-sized organization can expect to put down a few million dollars for packaged ERP software.
ERP Pricing Factor 2: The Hardware
The hardware refers to your computers that the software will be installed on. Although, technically, you do not have to worry about the hardware, many companies will also upgrade their computer, network equipment and security software when implementing an ERP system. You can add another $500,000 for a mid-sized organization’s hardware costs.
ERP Pricing Factor 3: The Training
It will also cost to pay someone to train your staff on the ERP system which often can take weeks. Not only will they have to learn the new ERP system but also how to effectively work this system into their daily tasks.
ERP Pricing Factor 4: Additional Professional Services
When it comes to additional professional services, this usually includes customization, conversion, implementation and maintenance on the system, all of which cost money depending on what ERP vendor you go through. Unfortunately, all of these are needed in order to have an effective ERP system. Customization is what makes the ERP system work specifically with your business. Integration will connect your old system to your new system and data conversion will fill in all the missing links between the two systems. Maintenance will depend on how the ERP software is treated and how effectively it performs.
One of the things many companies forget about is the testing of the software which includes the unit testing, component testing, performance testing and user acceptance testing, all of which will add to the ERP pricing.
Where Do You Begin?
Overwhelmed? The ERP pricing system can be a little overwhelming to say the least. However, almost all big and small businesses agree that, after the initial confusion, switching to an ERP system is smooth sailing and even smoother operations. So take a breath and relax. Simply fill out the form on this page and you’ll get a more comprehensive look at how to determine ERP pricing for your business.
