What Is an ERP?
An enterprise resource planning system helps organizations manage business functions and streamline operations with a centralized database and a user-friendly interface. Companies use ERP software to standardize business processes, collect operational data, improve supply-chain efficiency, promote data-driven strategies and increase collaboration between departments.
ERP systems are comprehensive solutions that typically include the following modules:
- Accounting and Finance
- Customer Relationship Management (CRM)
- Supply Chain
- Inventory Management
- Human Resources
- Business Intelligence
ERP System Pricing Models
Depending on the type of deployment, ERP vendors use two pricing models: perpetual licensing and subscription plans. Here’s how they work:
Perpetual licensing – Companies that choose to host ERP software using their own servers (on-premise deployment) generally pay a perpetual licensing fee. This one-time cost is paid up-front and is based on the number of users and level of customization.
Perpetual licenses usually don’t include recurring costs like maintenance, support and upgrades.
Subscription plans (Modern) – Companies can also pay subscription fee to access cloud ERP software, which the vendor maintains and hosts on a third-party data server. The software-as-a-service (SaaS) pricing model means fees are paid per user monthly or annually.
Subscription plans often require companies to have a minimum contract length and come in various tiers with increasing functionality and modules.
ERP implementation costs include:
Modules or features not included in base price – Some solutions may charge additional fees for individual modules or advanced features, including payroll, manufacturing and e-commerce. There are also industry-specific solutions that offer features for a particular market.
Customization – Many companies require customization for their specific business processes, and costs can add up quickly. Businesses should make sure they focus on adding only the features they need.
Hardware – Companies that want an on-premise deployment will need to purchase data servers and hardware infrastructure to host their ERP system.
Training – Some vendors may include basic training services for free during implementation, but others may offer them at an additional cost, especially if the training is done at the client’s site.
Small to medium-sized businesses can expect to pay between $75,000 and $150,000 for implementation (on premise), but moving to cloud-premise is far more cost friendly
Us at Integral can support you with any journey that you choose to take. However, we strongly suggest to deploy your ERP system on a comfortable cloud premise to reduce large upfront costs which requires hardware installations and which may not offer customizations as you desire.
Ongoing Costs to Consider with on-premise servers
ERP systems often require additional resources that aren’t generally included in the base price, such as:
IT staff – ERP systems can be complex to manage. Companies that choose an on-premise deployment will need internal IT staff to handle any technical difficulties that arise.
Customer support – Basic support (e.g., knowledge base, email support) is typically included in the price of an ERP solution. However, Integral Management Systems offer plans that include advanced support, such as priority support or access to a dedicated customer service manager.
Maintenance and upgrading – Most on-premise ERP deployments charge an additional fee for annual maintenance and software upgrades.
Many of the vendors follow the per user, per month pricing model with tiers that provide additional features.
Be sure to consider what modules or features are required, as well as future scaling and business needs. You’ll also want to research implementation costs and how long the process will take.
Microsoft Dynamics 365 allows companies to purchase individual modules based on their specific business area. For example, the sales professional module costs $65 per user, per month, while the sales enterprise module costs $95 per user, per month.
If you are looking for the right ERP system to fit to your company needs, with best pricing in the market, look no further.