So what’s this going to run me? The common answer in the ERP industry, “it depends,” can be frustrating for clients. There are some benchmarks, although they also represent a variable range as well. The typical process has end users select an ERP vendor and then both firms work together to determine costs and terms. This doesn’t mean going into the process without a budget or without understanding the factors determining price.
Here are more details about the main factors influencing ERP cost:
Software Costs: Per user cost typically ranges between $1,500 - $4000. Third party software add ons to boost functionality will also add cost.
Service Costs: Software to service ratio is at least 1:1. Meaning double the software cost for budget so that you have the money set aside for installation, customization, configuration, implementation, training and troubleshooting. If a firm needs more software customization, a 1:1.5 ratio is more realistic. Service costs cover planning and organizing the project, training, installing software, configuring the system, integrating existing business information and understanding reporting. Annual Software Maintenance is additional. Some software publishers have a mandatory annual support fee.
Hosting & Hardware Costs: This includes the server and server software, security and firewall configurations, database backup needs and recovery solutions. There is a difference in cost between operating on-site systems, versus hosting systems in The Cloud.
Price guarantees and fixed costs are not the industry standard for good reason. Implementation is never 100% predictable and even a fixed-price contract rarely, if ever, guarantees a true cap on cost. Those contracts typically guarantee price on what’s detailed in contract, but project scope creep still incurs additional cost. Fixed price quotes also typically build in a lot of cushion, so while it offers insurance against vendor incompetence, it may cost more if the project takes less time than anticipated. So is risk really mitigated? It depends mostly on the selected solution provider.
Look for a vendor that specializes in your industry or has expertise meeting your specific ERP needs. Be sure the solution provider takes the time to get to know your business and gets a complete picture of how your business works and what needs must be met with the new ERP system.
We would like you to consider Parallel Solutions? Give us a call at (440) 498-9920. Our Accounting Software division represents multiple ERP Software Solutions allowing us to assess your software needs and match the "right" software to your business. The Secure Network Solutions division of Parallel Solutions also provides expertise in choosing the correct hardware platform for your business system. Being a full service solutions provider offers you peace of mind, knowing that every aspect of your investment will meet your expectations. Our team will implement, train and support your company every step of the way.
Mary Jo O'Neill