Let's talk at +1 315.210.8558 | +91 120 4374402
Enterprise Resource Planning or ERP is the next-generation software that helps businesses to streamline their functions and operations. In this cutthroat business environment, ERP software helps businesses to understand which projects can lead to success, and which to failure. That said, many have claimed that ERP Software development cost is higher than their entire business cost.
Is it true? Well, the answer is layered. Various factors in ERP software determine the ERP software’s cost. And this is what we will determine in this article today. So, without any further ado, let’s get going!
How Much Does ERP Software Development Cost?
I will jump right to the conclusion. A user-based Enterprise Resource Planning (ERP) Software costs $9,000 for one user per project. After calculating the total number of users, ERP can cost a mid-size business from $150,000 to $750,000.
What seems like hundreds and thousands of dollars, can actually mean a lot less, given how much a company benefits from it. So, find out what is ERP and why its price is nothing compared to what it delivers.
What is ERP?
Enterprise Resource Planning Software, a business automation system helps companies to grow globally. ERP helps businesses to build a centralized database and easy-to-use interface.
Globally, companies use ERP to build efficient business strategies that will bring them maximum profit. Moreover, it also helps businesses to flow their data within the company smoothly and strategically.
However, there are various ERP types, and some are custom-made for specific business goals, while others are not. Therefore, custom software development costs more than general ERPs.
What Are Some Misconceptions About ERP?
As mentioned above, ERP pricing can seem a lot if a few things aren’t cleared. So, here are some things to learn and clear your misconceptions.
1. ERP Is Expensive
An ERP software can sound like a significant amount of money on the go. But when you look at the Return on Investment of the businesses, businesses have earned more than they have invested for the ERP.
2. All ERP costs are Similar
No, ERP Software pricing depends on its features. Moreover, it depends on the custom software development company in USA from whom you’re purchasing the software.
3. ERP Costs are Made Only Initially
ERP costing can come in various forms. For example, if you’re buying the software from a vendor that offers ERP subscriptions, it can be cost-effective from the get-go.
4. Expensive ERP Solutions are Better
No, that’s not true at all! Expensive ERP solutions are not always good. Some affordable ERPs are more preferred by companies than expensive ones.
That’s because the low cost of ERP systems for small businesses has proven to work better.
5. One Can’t Negotiate With ERP Pricing
Not true! You can easily negotiate the ERP pricing Depending on the Enterprise Software development company in the USA from which you’re buying the software.
What Are Different ERP Pricing Models?
How much does an ERP system cost? Well, it all depends on the ERP type you’re subscribing to or purchasing. So, take a look at the type of ERPs, and what factors their prices.
1. User-Based ERP Software Pricing
User-based ERP is one of the most common types of ERP. In this model of ERP, the prices rise, as you keep adding on members to the software.
There are various types of users, like Concurrent, Named and Limited. So, decide how many and types of users you want before planning to purchase ERP software.
Here are some things you must know about before planning on purchasing User-based ERP:
- Concurrent ERP User: Keeps track of the existing users in the company, throughout the globe. The price increases as the number of users increases.
- Named Users: ERP keeps track of all the logged-in users, and users of similar IDs cannot log in at the same time.
- Full & Limited Users: Full users have access to all the software functions. While limited users only have access to selected operations.
2. ERP Software Module Pricing
Most Enterprise Resource Planning software comes in various modules. These module suits are company ledger, accounts that need payments, inventory management, and more.
If you want, you can purchase each of these modules individually or in a package. Moreover, when you pay for the modules, you also get to decide whether you are going to pay for individual users or in a package.
3. Enterprise Software Licenses
When you purchase your ERP software, a license is also something you can finalize with the vendors. ERP Software is generally licensed every year, however, each vendor has their licensing policies.
So, it’s better to read extensively about them before agreeing to a price.
While it’s true that a good custom software development company in the USA will never charge you unnecessarily, you should be careful nevertheless.
4. Usage-Based Pricing
ERP pricing generally comes combined with your module. But now as SaaS has emerged, ERP is also available in usage-based pricing. This pricing can be calculated based on the size of the company, how many users will be handling the software, and the business transaction.
Therefore, it’s best to communicate with the vendor from which you’re purchasing the software before planning the payment structure.
5. Pricing of ERP Installation
ERP software installation can also cost you depending on the vendor you’re purchasing your software from. These prices include training for ERP usage, implementation, and customization charges.
One thing you must know at this point is that cloud-based ERPs have lesser implementation costs than on-premise ERP software.
ERP software development cost is not always sky-high. If you’re smart, and do your research before purchasing an ERP software for your company, you can get it for an affordable cost. Therefore, if you play smart, you have more chances of winning.