Factors That Determine ERP Cost

Doing an ERP cost breakdown is very important if you have decided to implement and ERP software in your business. A lot of ERP vendors in the market are notoriously cagey about the cost of their software. Since this software is not cheap, you need to at least have an idea about the cost of implementing it in your business to avoid frustrations.

There are various factors that influence the final price of an ERP system. Typically, when you choose a vendor to buy the ERP solution from, both of you will negotiate the terms and enter into a contract. This can be a long, drawn out affair depending on the size of your company and your requirements, but the total price is generally influenced by several major factors.

One of the factors that determine the cost of implementing an ERP system is use and customization. The size of your business will most likely determine the number of users you have on the system as well as the applications that are required. Small and midsize businesses will generally require fewer user licenses, but they may not have access to some of the higher-end applications that come with some of the larger systems on the market.

There are various common features of ERP software, namely ERP accounting, customer relationship management, business intelligence, human resources, manufacturing, inventory management and supply chain management. Even though each of these features can add value to an overall ERP system, most companies don’t need all of them, and conversely, some companies may require additional features. For instance, some of the companies that do custom manufacturing might require additional modules and features to allow for more flexibility with their production planning as well as supply chain management applications.

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