Real Cost of an ERP

An ERP system elevates your business on all fronts, however it does bring with it certain considerations and most importantly, it brings its costs. So, what expenditure do you have to be prepared for when seeking an ERP solution? Irrespective of your industry or whether it is on-premise or cloud-based, an ERP solution has basic costs you must include in your forecasts and estimation.

Costing impacts the appeal of the investment and varies based on your company’s needs and financial capabilities. Are you willing to invest a large sum upfront on an on-premise system or are you worried about the security of a cloud-enabled system? If your needs are flexibility, quick implementation and lower costs then a cloud ERP system could be suited to your company. Here is what to look out for:

1. ERP Ownership Cost

Overall, the cost of the cloud-based model is relatively lower as it requires a smaller upfront cost and is usually deployed under a subscription-based model. The ERP host provider will also host most of the bigger costs in terms of physical space and tailor the cost to the company allowing for more well-suited pricing that is flexible.

2. ERP Implementation Cost

Cloud ERP proves to be the cheaper option when compared to on-premise systems in terms of implementation with less physical space and systems required. The software is deployed virtually and only solution configuration to business needs is carried out post-deployment to ensure it runs smoothly in accordance with requirements.

3. ERP Upgrade Cost

Upgrades are a given when it comes to any software platform and ERP is no different with on-premise requiring a team to come in and upgrade the systems which involve software and resource costs. However, cloud ERP software offers version upgrades and is continuously up-to-date thanks to the automatic nature of the setup with no additional costs or a physical person to carry out the upgrade.

4. ERP Configuration Cost

Every ERP system to some extent requires customization to suit the needs of the organization.  For instance, features may be added or removed based on process requirements. Cloud ERP software can be easily customized with redundant features being removed or added with minimal cost to the company.  An onsite ERP would involve resource and reconfiguration costs as well.

 

An ERP software can prove advantageous on several fronts but before investing in the right solution, take into consideration your company’s specific needs and the accompanying costs to ensure the situation is completely beneficial to your organization.

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