Cost components of ERP software

ERP software: A guide on the cost components

Planning to get an ERP system implemented in your organization? Yes, you are on the right path because it will improve your business productivity. But, understand the main components of ERP cost better to plan, manage, and execute the ERP implementation.

ERP software pricing variables

The key variables that make up an ERP software’s price are:

Number of users

As the number of users increases, the cost of ERP software increases. So, the first point to decide is the number of users of this ERP system. Also, ask for the rise in price per user when you will add new users in the future. It will increase the total ERP software cost, as the vendor will add costs for every new user.

Customizations and modules

ERP software has various modules – human resources, customer relationship, inventory, eCommerce, analytics, finance and accounting, supply chain, marketing, etc. These modules improve your business functionality. What modules you wish to add to your ERP software depends on your business needs.

These customizations and add-ons are not cheap. The best bet is to find an ERP system whose basic version satisfies your business needs, so you need to spend less on customizations. You must find a vendor that offers integration services for additional modules.

Types of third-party support

The additional help and support you take from a third-party vendor for ERP software implementation also add to the cost. Some offer just implementation help with no training and post-implementation support services. Other vendors provide a whole consulting experience with the right strategy and all support.

If you do not have technical experts in your team, you will need a consultant with comprehensive support. If you have technical expertise but just need the system, an implementation partner will solve your problem.

On-premise or cloud-based

Vendors’ first question when you inquire about ERP software is, “Do you want a cloud solution, on-premise or hybrid?”

You have to pay annual or monthly subscription fees for cloud solutions. In the case of on-premise solutions, the organization is charged a one-time perpetual license fee. In both cases, there are additional charges for training, updates, and support services.

Over some time, the total cost of ownership becomes nearly the same. So, you must choose between high capital expenditure (on-premise) or high operating expenditure (cloud).

Training requirements

An important point that many organizations ignore, is training requirements for actual users of the ERP software. You can have online training manuals, classes, and videos. But the effectiveness of on-site training is higher, though expensive.

You can conduct training based on the role of employees and their usage of ERP software. Alternatively, you can do it department-wise to learn specific modules. Whatever the case, the training must address your current and future use of the ERP software for your business requirements.

Software upgrades, maintenance, and support

Any software needs updates, upgrades, and maintenance. You must ask for these costs from your vendor before hiring them. Also, add the cost of regular support services required when you face problems using the ERP software.

These are cost elements that add up to the total ERP software price. You can create your budget based on this. If you are looking for an competent, affordable ERP software, you can contact Websys.

We are a leading provider of ERP solutions in India that is perfect for your business. Our ERP software is available for your business processes in any industry sector. The system is easy to learn, use, and operate, saving time and money.