How to reduce ERP implementation Costs

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ERP cost can be hefty but reducing the Pricing is an Art while implementing any ERP solution. ERP software is considered as the most comprehensive and complete solution for Small to Big organizations since Enterprise resource planning software covers every aspect and workflow of your business and helps you with more efficiency and effectiveness in working. ERP development requires a lot of pre-planning before going to the actual implementation stage. Therefore one of the biggest factors involved is the investment and cost to complete the project.

There are ERP projects which double it cost with the changes in scope and may sometimes lead to failure also. Therefore proper management of your ERP investment is a must step before even considering ERP software for your business. Business owners should also understand that ERP implemented successfully can bring long term fruitful growth to an organization. But cost saving is an important factor while choosing the vendor, product, and reducing the total cost of ownership.

In this article we will shed some light on how organizations can really reduce the cost of ERP implementation. We will not go into details of every point so if you need explanation you can just comment and we will ensure to provide the answer.

The various business operations are supposed to be made simpler by an ERP system. A company cannot allow the cost of ERP implementation to be a burden. If the 8 methods are correctly implemented, controlling the costs of ERP software is very simple. The methods are detailed below:

Budget & Proper Plan

Any change must begin with a well-thought-out plan and the allotment of the necessary funds. Before adjusting to a new ERP software, a lot of questions need to be asked. How much does the ERP Implementation Cost ? or what are the Pricing involved ? What is the change management strategy ? How will data transfer take place? How many employees will use the tool, and how much training will be required? Does the software need to be installed and purchased additional hardware?

To avoid failure and financial waste, one must have the answers to all of these questions. . Another factor the business should pay attention to is the budget. The funds allocated are merely investments in the future. Therefore, you should have a clear budgeting plan that outlines how much and where you intend to spend your money.

Pick the ideal ERP program for your requirements.

There are many software tools on the market, and picking the best one is so important that making the wrong choice could be expensive. Every industry, as we all know, operates differently and follows a specific set of procedures. Similar to this, there are numerous ERP tools created especially for particular industries.

When compared to purchasing software with advanced features that are no longer necessary to you, choosing an industry-specific software tool will save you money. Therefore, prior to making a decision, research should be conducted with the appropriate software vendors. This might significantly lower the price of implementing ERP.

Limit your customization:

Businesses frequently look to add new features for potential future improvements. But we must keep in mind that tailoring the software is a difficult task that takes more time and money. A repeated change, if necessary, would not be possible at the same time. Therefore, it is wiser to stick strictly to the requirements rather than making excessive customizations. Since the custom code needs to be updated whenever there is a new release, the other drawback of software that has been specifically designed is that it might not receive the necessary updates from the vendor.

Select software vendors carefully:

Once the software has been chosen, picking the right vendor is equally crucial. Effective training is necessary for the implementation process, as is post-training support. The business should be clear that the money spent also covers all of those supports.
Additionally, the employee should have complete technical reliance on them to receive the best support and knowledge sharing. This will also aid in the expansion of the business. The selection of the appropriate vendor is crucial to the implementation process’s overall success.

Consider ROI:

It is essential to make a list of the long-term goals you have before beginning to look at change management. Many businesses adhere to a plan that can only address their current problems and allot funds accordingly. This, however, is not a safe course of action. One needs to have a detailed forecast of their future successes or investment returns and work toward them without sacrificing the present.

Choose cloud-based software:

As the cloud revolution has been widely publicised. Due to the numerous advantages of using cloud tools for business, cloud platforms have experienced tremendous growth. With the aid of an internet browser, the cloud software is accessible from anywhere in the world.
As a result, there is no longer a significant need for a hardware desktop application type of system, which naturally results in time and money savings. It is not necessary to set aside more room to install software for all of the IT infrastructure.
By using the cloud tool, which is subscription-based and based on the number of users, you can save more money than by purchasing individual licences. As a result, since the cloud platform doesn’t need any infrastructure, it helps you save money on ERP implementation.

The best implementation strategy for your company is:

All of your company’s historical data must be transferred to the software’s main database as part of the implementation process. The historical data could be in the form of Excel sheets or manual entries of any kind. Whatever the format, the business must develop a clear plan for transferring the data because this step is crucial to the process’ success. Therefore, it is advised to have a plan in place before starting the process.

Training for employees :

The final and most crucial area to concentrate on is employee training. Employees should also have a say in whether ERP software is implemented by the organisation. Because they will be the ones working on those tools to improve businesses in the future. Consequently, comprehensive software training for the staff is required..

Final Thoughts :

There are a lot of different of strategies for lowering ERP implementation costs. In plain English, a replanted strategy will enable you to achieve your goals. A lot of small businesses are still debating which software to purchase. These misconceptions and ambiguity shouldn’t prevent businesses from expanding any longer..

Common Questions on ERP Software Costs and Pricing

What are ERP costs?

As per 2022 ERP reports an averge ERP software implementation cost somewhere between – 8000 USD to 9000 USD based on the project and implementation size. These pricing for ERP can differ based on the number of users as well as other indirect costs for the implementation. For Large business the cost may be more compare to small and mid sized businesses.

Why ERP Pricing are Costly ?

ERP Pricing and cost consist of various areas such as hardware, network, and labor costs from IT and other departments in order to ensure the system can run properly. ERP software after the implementation becomes “heart” of organization therefore consistent improvisations is needed to maintain the software.

How much is ERP monthly?

There are many various ERP software that provides you with monthly subscription based model. The overall mothly ERP costs for licensing is dependent on the number of users as well as the size of the solution. Although There are one time ERP cost factors that can be use by implementing Open source ERP software. A minimal cost for per user base can vary between 15 USD to 35 USD based on the modules.

What are the 4 types of cost with ERP system ?

Mainly there are 4 types of ERP cost invovled with ERP implementation Pricing they are – Fixed Cost – (One time implementation Cost) Variable cost – (User licenses or Server Cost). Direct Cost – (Functional specialist hiring cost and indirect cost – ( Support & Maintenance)

Is ERP expensive to implement?

ERP software can be expensive based on the solution you are selecting for your business. If you are implementing Open source solution the cost may be reduce but if you are implementing any license based branded ERP solution the cost may be higher. Further Modules server required and number of user are some of the factors that can make cost expensive or inexpensive for ERP solutions.

What is the price of ERP in India?

The ERP software price ranges between 1 Lakh to 20 lakhs, depending on features, number of users, functions, and other factors. There are companies in India who invested crores of Rs towards ERP Implementation and development

How much do ERP consultants charge?

ERP Consultant Pricing varies based on their experience and how vast your ERP implementation will be. A basic rate of 25 to 50 USD per hour is what current ERP consultant charges. (data as of 2023)

If you feel we miss any tips – Your comments are always approved with your contribution.

The above points and tips are just few steps that can reduce your cost or I would say control your overall total cost of ownership while increasing the ROI. We at GlobalTeckz offers you with one of the most cost effective and Open source ERP solution that reduce your cost from licensing and can be customized as per your requirement. Please fill our contact form and we will get back to you or email us on info@globalteckz.com

How to reduce ERP implementation Costs