How Much Does ERP Cost?
Compare the cost of replacing your existing system vs. keeping it.
We hear this question every day from people just like you who are wondering if it’s time to upgrade from basic accounting software or replace that outdated legacy system. No matter what system you’re using, if it‘s no longer serving you well, you have a choice to make:
- You can move to a modern solution that will help you take advantage of the latest technology and fill in the holes where your current software is lacking.
- You can keep your current system, postponing your move to a more modern solution.
This is often not an easy decision. One of the first things people want to know is, “How much does ERP cost?”
To fully answer the question how much does ERP cost, you must consider much more than the software cost. The total cost includes these 4 factors:
The software license fees
Often referred to as annual maintenance fees, these can cost businesses up to 18% of the software’s original purchase price per year. That means you are paying to replace your software every 5 ½ years, even if you don’t update it at all.
This is a big factor in the cost of running on premise solutions (those that you run on your own servers). With each new version comes a new set of system requirements and before you can install the latest software, you must make sure that your hardware is up to supporting it.
Implementation people costs
How much you will spend paying consultants and your internal IT team for their time to help you get your new system up and running.
Ongoing people costs
How much will you spend paying consultants and your internal IT team to:
- Keep your servers and other networking equipment running smoothly
- Install software updates and bug fixes.
- Set up any customizations your business needs to use the software.
True Cost = ROI – TCO
Most ERP pricing models just calculate the initial hardware infrastructure, software licensing expenses, and implementation costs, but do not consider the impact of ongoing operating expenses.
Return on Investment (ROI)
In our pricing model, we first look at the potential cost savings or Return on investment (ROI) the system will offer you. Some results can be hard to measure, such as improvements in employee satisfaction and teamwork. As part of our due diligence our local partners can help you determine your possible ROI.
Total Cost of Ownership (TCO)
The software license fee is not the cost of the software. The Learn more on TCO in this guide total cost of owning and maintaining the system over the 7 to 10 years expected life includes a great deal of “hidden” on-going people costs, plus your annual maintenance fee.
Compare the cost of investing in a new, modern system with the cost of doing nothing
Thanks to this helpful tool developed by Acumatica, you are five easy questions away from learning how much does ERP cost in comparison to keeping your existing system. Backed by the data it provides, you can be confident you’re making the smart decision for your business!
Questions about your results?
We’re just a call, email or online chat away! Our team has over 25 years’ experience helping small and medium-size businesses just like yours find the right ERP system for their needs.