Understanding ERP Price and What It Means for Your Organization

How to ERP Price Search

An ERP solution replaces multiple, disconnected systems. It organizes and links all areas of a business and typically includes accounting, financial, CRM, supply chain, inventory, manufacturing (and more) applications. Such a single-system solution collects, stores, and synchronizes information, making it accessible to everyone in an organization in real time. It also streamlines business processes, promotes data-rich strategies, and increases overall efficiency. You’ve probably read these points before if you’re in the middle of an ERP price search.

A general search for the cost of an ERP system, or, more precisely, the cost of an ERP implementation, will return some good estimates. Based on data compiled from 1,338 ERP projects, Software Path research says that an ERP implementation will cost, on average, $8,265 per user. (Quick note: Acumatica does not charge per user.)

This price may or may not be true for you and your business, but it does give an idea of what to expect as you start contemplating an ERP budget.

Putting Together Your ERP Budget

There are various factors to consider when creating an ERP budget, many of which are common no matter what ERP product you choose. For example, you will need to think about:

• Licensing
• Number of users (Again, Acumatica does not charge per user.)
• Your industry
• Customization needs
• Complexity and number of integrated 3rd applications
• Data conversion/migration
• Frequency of updates and upgrades.
• Consumption volume
• Number of companies and locations
• Complexity of your business processes
• User training

Prices will vary with each ERP system, but you can generally expect ERP implementation services to cost about 1.5 to 2.5 times the base cost of the software.

Finding the Right Licensing Model for Your Organization

Licensing—the foremost factor common to all ERP systems—will be one of the biggest costs to your organization. In the ERP context, there are two licensing forms: perpetual and subscription.

In perpetual (or private cloud) licensing, the company pays a one-time fee for the ERP system. This model is designed for businesses that choose a private or self-managed solution. They pay upfront for the hardware and software and are responsible for security, maintenance, and upgrades (which means they will also need IT experts on hand to manage these requirements). An annual maintenance fee for receiving software updates is also expected.

A SaaS (Software as a Service) subscription plan is designed for companies that choose cloud ERP software. This monthly or annual subscription gives businesses access to the software, which the ERP vendor hosts and maintains. ERP vendors also include updates and upgrades as part of the ERP price. This means that a company’s IT department can focus on more forward-looking projects—or that an IT department may not be necessary at all.

There are pros and cons to either licensing option. Do you want to have the hardware in your building, with an IT department to manage it, or do you want to eliminate that need and the additional costs that come with it? What are the tax advantages of capital vs. operating expenses? Can you pay a one-time, large, upfront cost, or are ongoing, monthly payments a better fit for your business? What is the total cost of ownership over the product’s lifetime?

Aligning Stakeholders and Teams

The answers to the questions above will help you move forward with your budget, but your momentum may be checked if you haven’t gotten your stakeholders and team members on board. Sean Chatterjee, the VP of Partner Sales at Acumatica, writes about the importance of this step in How to Get Organizational Buy-In for Your ERP Implementation (and Why It Matters). He says that getting leadership support for an ERP investment is the first critical step, followed closely by gaining organizational support:

Just as you convinced the leadership team, you’ll now need to convince your team members that new technology will benefit them and the company. Unfortunately, many employees may feel the disruption to their daily activities and workflows by the implementing and learning of an ERP system (one that may or may not make them more efficient) isn’t the right decision. It’s in your company’s best interest to address these concerns immediately. Organizational buy-in (or the lack thereof) can make or break your ERP implementation. If employees refuse to use the new system or only use it half-heartedly, your company cannot reap the rewards brought by automating your business management processes.

To get organizational buy-in, Sean recommends communicating the plan to implement a modern cloud ERP system, the benefits and features of that system, and the fact that the leadership team is supporting the project. Having your entire team invested in your ERP implementation will help make it successful.

How Acumatica Can Help

Now that you have a good idea of costs and what factors to consider, it’s time to take your ERP price research process one step further by applying your knowledge to a specific cloud ERP solution.

We aren’t addressing “how to choose ERP solutions” today, but we believe Acumatica Cloud ERP should be on your list to evaluate. Our award-winning, comprehensive cloud ERP software is built on an open platform. It delivers value through integrated workflows across our full suite of business management applications, including CRM, Financials, Field Service, Project Accounting, and Inventory Management. We also provide industry-specific solutions, such as our Construction, Retail-Commerce, Distribution, and Manufacturing Editions.

In addition to leading-edge technology, best-in-class functionality, and customer-friendly business practices, we offer a unique pricing structure, making our cloud-based ERP solution affordable for small and mid-sized businesses. Unlike most ERP providers, Acumatica does not charge according to the number of users. We charge only for the functionality you need—the resources and features you actually use. You can add as many users, suppliers, and customers as necessary without paying for additional licenses. As your company grows, Acumatica will grow with you.

To learn more about Acumatica’s cloud ERP software and its ERP price, contact our experts today.

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