HOW MUCH DOES ERP IMPLEMENTATION COST?

ALL COSTS BY SOFTWARE TYPE On-Premises: Big legacy ERP/MRP systems On-Premises: Out-of-the-bo ERP/MRP SaaS: Postmodern ERP/MRP

 

Key characteristics

• First introduced in the 1970s• Very flexible, deep customization required and can be perfectly fitted for a company• Very big and complicated• Very long implementation times• Expensive to obtain and maintain

• First introduced in the 1980s• Can be installed out of the box• Less flexible, but still very big and complex systems• Customizable• More affordable than legacy systems

• Emerged in the 2010s• Modern user interface• End-to-end service, the client only needs devices with internet connectivity• No software installation• Less flexible, but still powerful and customizable• Always up-to-date• Short implementation phase• Subscription service

Unavoidable costs

• Licensing• Hardware• Training and implementation• Custom development• Software maintenance

• Licensing• Hardware• Training and implementation• Software maintenance

• Subscription fee

Situational costs • Additional training • Additional training• Custom development

• Training and implementation• Custom development

SOFTWARE TO ADDITIONAL COSTS RATIOLegacy ERP 1 to 1.5+

Involves hardware cost, deep customization is always required which drives the price up, the projects are prone to drag out on go over the budget due to services;

Out-of-the-Box ERP 1 to 1+Involves hardware cost and even though these can be installed out of the box, often these solutions are complex and unintuitive, built on the 80s and 90s frameworks. 

Postmodern ERP 1 to 0+No installation required. The software is designed to be intuitive and effective by utilizing the latest frameworks. In most cases can be implemented autonomously.

COST BREAKDOWN OF ERP IMPLEMENTATION

Licenses:One-time license fee per user is around $4,000. For out-of-the-box ERP $1,600 - $4,000. A SaaS ERP subscription fee per user/year is in $400 to $900 range. [1-5]

Hardware:For an out-of-the-box ERP, a budget server will cost at minimum $9,000. [6, 7]. A decent hardware solution with related items to run a Legacy ERP can cost $35,000 and more [2].

Services:Out-of-the box and legacy systems require more additional services. Average hourly rate ranges from $100 to $200. Since modern SaaS ERP are built using a different approach there is little-to-none additional services needed.

COST BREAKDOWN OF ERP IMPLEMENTATION

MAINTENANCE COST

ERP System MaintenanceOn average the maintenance cost is in the range of 15-20% per year of the license cost. Usually percentage is lower for legacy and higher for out-of-the box systems.No maintenance fee for the SaaS solution.

Hardware MaintenanceRegular hardware maintenance fees can be around $2,400 – $4,800, up to $10,000 a year. Cost of electricity for a small server is ~ $500 a year. The hardware needs to be replaced every 3-4 years. [7, 9, 10]

Employee TrainingThe more complex the system is, the more difficult it is to prevent brain drain. Training is needed for new workers and to maintain effective practices across the company.

MAINTENANCE COST

TOTAL COST

Production planning and reporting Supply chain management Stock management CRM Managerial statistics, business intelligence Integration with online accounting solutions

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MRPEasy Cloud ERP/MRP Solution

Reference List[1] http://www.mrpeasy.com/pricing[2] http://www.calsoft.com/blogs/how-much-does-an-erp-system-cost/[3] http://www.itqlick.com/pricingnow/question/fishbowl-inventory-cost/[4] https://www.itqlick.com/pricingnow/question/enterpriseiq-cost/[5] https://desktop.apps.com/apps/135596[6] https://www.digitalfirst.com/cloud-server-vs-office-server-which-costs-more/[7] http://www.gizmofish.com/blog/bid/337277/IT-Support-Tip-What-will-a-server-cost-my-small-business-Part-1[8] http://www.navisionsupport.com/faq.php[9] http://www.itjungle.com/tfh/tfh061311-story03.html[10] https://commons.wikimedia.org/wiki/File:SAP_Implementation_process-data_diagram.png[11] http://www.zdnet.com/article/toolkit-calculate-datacenter-server-power-usage/