Beginning the process of looking for a new ERP (Enterprise Resource Planning) software solution can be a daunting task. Where do you start? Find ratings online and hope they are in line with your needs? Narrow down vendors by price alone first? Find only local ERP providers and hope they fit?
Although you could find a good solution by any of these methods, starting by price would be a solid start so that you only look at what is feasible. Here are some key things to keep in mind when budgeting for an on premise ERP solution.
ERP Budgeting Considerations
1: Licensing costs
ERP providers charge based on the number of licenses (people or work stations) using the system. The numbers vary greatly, but are generally in the thousands. Some also offer discounts for a larger number of users or payment in full.
2: Annual maintenance
The annual maintenance, which usually includes minor updates, training, and support, is generally a percentage of the licenses. So, any discounts or deals can continue to be helpful here.
The costs for implementation will vary based on how many users you have, how many/what modules you choose, and what hardware you already have in place. It is usually in the thousands as well.
These are the greatest variables in price. You might not need any and you might need a lot, depending on the solution you go with and how your business is structured. Always set aside an extra amount of money for customizations that will help your ERP and business work better together.