Are ERP Systems Expensive?
Once an organization has reached their tipping point and is considering investing in a financial management system, one of the first questions the CEO will ask is, “How much will it cost?” This is a reasonable question and although it can be difficult to make an exact estimation for the entire ERP project, there are a few areas to examine that can help define a range for the implementation.
We have identified three key factors that will impact the total cost of your ERP project. Here’s a rundown of those items:
1. Company Size
In general, the larger a company is the more complex their requirements. Larger companies often have a larger accounting department which means more users will need to access the financial management system. Regardless of you company size, you should have a good feel for have many concurrent (full) user licenses you will need, along with how many limited users. Limited users are for employees who don’t use the system very often or for very long, and those licenses are significantly less expensive then concurrent licenses.
2. Project Scope
Once you decided on an ERP partner to help you with your implementation, you will likely go through a thorough scoping exercise to define all the processes and requirements that are needed as part of the project. However, you can begin to identify some of these areas on your own. Certainly the more processes, data migration, and customizations that are required will increase the price of the implementation. So getting a feel for the complexity ahead of time can help you start to better understand how complex of an ERP project it will be.
What other business systems are you using that you want to connect with your ERP system? Are there other software products or modules that you want to implement as part of the project? Make sure to identify these since the depth and scope of these integrations/add-ons can have a significant impact on the overall cost of the implementation.
Obviously, there are many other factors to consider for a comprehensive ERP implementation and doing diligent research will be a big help. Use the three items above as a starting point to begin narrowing down the cost estimate for your project. Also, beware of cost estimates that come in significantly above or below the initial range you define. Low estimates could come with increased project risk and excessively high cost estimates could be just the beginning of your spending.
Not sure where to go for your ERP implementation? BroadPoint is a Microsoft Dynamics ERP and CRM Gold Certified partner. We have performed hundreds of implementations across dozens of industries. Contact us today to learn more
Since 2001, BroadPoint has helped over 600 organizations, including fitness centers and health clubs, accelerate growth. Contact us to learn more about how we can help you get to the next level.