ERP Implementation Cost

The first question that any business organization would think about before implementing or opting a new process or an asset is the cost of implementation in the whole process. Although all business organizations prefer the best software, they also prefer the assets to be cost effective. The same question arises with the ERP systems as well. The ERP systems are considerably low when compared with the manpower costs. And with different vendors, the ERP systems prices may vary. There are also some other functional features to be considered and added along with during the ERP implementation.

The cost of an ERP implementation has some major factors to be considered. One among them is the size and type of the company, the maximum number of system users in the company. A medium sized business organization will involve complex process installations. Most ERP management systems are priced based on the maximum number of system users and the authorization or access level every user is allocated with the system. Taking into consideration this factor, a moderate sized business organization will have to pay around 2000 to 4000 dollars for every user who accesses the system. Sometimes, it is required to purchase additional licenses for system users with limited access level which is charged at a lower price for every user. Different vendors offer different prices based on the requirements. In certain cases, these come as a package if the requirements are more and the company size is large.

Apart from the ERP software applications, there are also other software products offered by third party and which can be used in combination as add on. It is completely based on the company’s requirements whether to opt for the ERP software enhancement. However, making use of the add on will be charged about ten to thirty percent of the ERP software.

The cost involved in the implementation of the ERP software will also include factors like the scope of the ERP software being used, the complexity involved in the software implementation, transaction volume and also the maximum number of third party interactions. The implementation costs of the ERP software systems is measured based on the software and services ratio. Therefore, the more services requested by the companies will increase the implementation costs. If any company requires only the ERP software and not much services, they will be priced less.

On the whole, the implementation cost of the software for a medium sized business organization will be around 150000 to 750000 dollars. However, this is just the implementation cost. Apart from this price, the company is also charged an additional price for hardware and infrastructure set up. This is just the estimation of the installation or implementation at the initial stage. However, the organization should again choose a different price if they want to make use of a hosted or cloud based software systems. The cloud based ERP software solutions go on a pay as you go subscription usually and are comparatively cheaper than installing and running the ERP software systems.