How Much Does an ERP Cost? - Brainsell (2024)

FAQs

How much does an ERP cost? ›

A 2022 ERP report showed that the average budget per user for an ERP project is $9,000. When you factor in how many users your system may have (especially for larger businesses), and added costs, you'll find an ERP implementation can cost anything between $150,000 and $750,000 for a mid-sized business.

To start, the average cost of ERP software is between $1,740 and $9,330 per month, though this range can significantly increase depending on your annual revenue.

An ERP system saves money on operational costs

Investing in an ERP system like NetSuite can reduce your overall operational costs by 20%. A large amount of these savings come from inventory control. Inventory costs will hit your business two times- carrying and handling.

ERP can help you optimize inventory, reduce waste, and lower your cost of delivery. 3. Manufacturing ERP simplifies and streamlines your business.

Using a free ERP system can be a great starting point for small businesses looking for their first system. A free ERP system is exactly that - free. These systems are typically open-source or have a free pricing tier where businesses can use the software either at its full capacity, or use limited features.

It is an effective way to reduce operational costs and increase profit margins within a business. Despite ERP being labeled as a single software, there are multiple different forms of ERP systems. Various modules and features can be added or removed to an ERP software to meet the unique demands of a business.

Sage ERP solutions is one of the most expensive on the market, with ERP costs of $2600 per month, but this price accounts for three users.

The bottom line of ERP cost

But as a rule of thumb, you can plan on a software and services project that's between one and two percent of your annual revenue, including training. If your business is on the smaller side ($3,000,000 or less), you should expect the percentage to be closer to two percent of annual revenue.

What is the highest salary for a ERP Consultant in India? Highest salary that a ERP Consultant can earn is ₹15.5 Lakhs per year (₹1.3L per month).

ERP costs are only for the initial purchase: Not necessarily — some vendors offer subscription-based models with ongoing support that incur costs ongoing. You'll need to consider the total cost of ownership over time. Make sure you understand the total costs from implementation through years of support.

What is the average lifetime ERP system? ›

From our research and experience, ERP systems need to be upgraded regularly. Most governments hold onto a system for 15-20 years between entire replacement projects.

A new ERP system implementation is a time-consuming process, especially if you're using obsolete hardware. It can take as long as two years for ERP software installation. Given that fact, if you want to invest in ERP software, you should plan to avoid any disruption in business processes.

For one, because ERPs are comprehensive systems, they eliminate the need for separate software in each department. This saves money in terms of data re-entry (which can be costly), error reduction and the recurring costs of licenses, updates and training on software.

ERP management can integrate all of the different aspects of your business including purchasing, planning, inventory, sales, marketing, budgets, and human resources.

There are three main types of ERP systems that function with different deployment model options. The most common types of ERP systems include cloud ERP, on-premise ERP, and hybrid ERP.

ERP systems can sometimes fail

With ERP software, companies often fail to follow the discipline that they follow in other areas of their business. Essential steps are sometimes missed, such as benefit analysis and risk assessment, cash flow and performance goals.

It's expensive. On-premise ERPs have a reputation for being expensive. At first, you incur the upfront cost to acquire the hardware and software for setting up the system at your premises. Then you must pay the IT team for regular maintenance and debugging.

Key disadvantages include the high costs of ERP software, its complexity, slow implementation, and data migration. If you want your procurement process to be as efficient as possible, it's best to invest in a P2P solution that provides integration with an ERP system.

Increased Efficiency

One of the primary advantages of ERP is that it allows companies to automate manual and routine functions. This frees up employees to focus on more revenue-driving tasks, as well as standardize common business processes.

According to Gartner, ERP implementations failure rates can exceed 75%. Meanwhile, global consultancy McKinsey estimates that more than 70% of all digital transformations fail. Understanding some of the reasons why ERP implementations fail before starting your project can help you mitigate risks and ensure success.

Is Excel an ERP? ›

ERPs are a single integrated system, making them less vulnerable to human error. On the other-hand, Excel is an extremely manual tool. Instead of being centralized and integrated like an ERP, multiple departments within your organization will rely on different sets of Excel spreadsheets containing the same data.

Latest ERP Increase in Singapore Effective 13 February 2023

With ERP rates varying anywhere from $0.50 to as high as $5, which is lower than the $6, we saw pre-COVID-19.

The ERP fee is immediately deducted from the card, so ensure that your card (e.g. NETS CashCard or CEPAS Card) has sufficient value. Save the inconvenience of having to make such checks by registering to a backend payment services. Learn where you can purchase the following stored-value cards: NETS CashCard.

The big three: SAP, Oracle NetSuite & Microsoft Dynamics 365 Business Central. There are three major players to take into account in the ERP software landscape.

Amazon has been using SAP as its ERP system for its business processes. While the detailed SAP modules implemented by Amazon can't be predicted, some of the modules that have been implemented by Amazon include; SAP Basis / NetWeaver Administration. SAP Business Suite.

Hourly Wage for ERP Consultant Salary in the United States

How much does an ERP Consultant make hourly in the United States? The average hourly wage for an ERP Consultant in the United States is $37 as of March 28, 2023, but the salary range typically falls between $33 and $43.

ERP cost is determined based on the complexity and nature of the business. A discrete manufacturing business will require quite a bit of functionality to include supply chain planning, production management, quality control, etc.

ERP ROI Statistics

Organizations use ERP to become more efficient and cut costs. Statistics on ERP return on investment (ROI) highlight the benefits of the technology. ERP implementation led to business process improvement for 95% of businesses.

Is ERP appropriate for small business? ›

The right ERP system helps a business to leverage all the resources the enterprise has access to. This improves efficiency, reduces wastage, and enhances management insights. So is ERP good for small business? Absolutely!

Market Growth

The global sales of ERP software have seen an uptick due to growth in the telecom and banking industries. Cloud-based ERP software offers many benefits such as improved business insight, reduced operational costs, better collaboration capabilities, increased efficiency levels, and higher user adoption.

So, as we can see, ERP solutions are very complex, and their development is a difficult process. Building a resource planning system according to customers' specifications requires an experienced team with a high level of expertise.

SAP. Started by a team of former IBM engineers in Germany, Systems, Applications and Products in Data Processing (SAP for short) was founded in 1972 to provide business software for enterprise-level manufacturers. They released their first ERP system, R/2, in 1992.

ERP implementation failure generally results from inadequate planning and resource management, coupled with a lack of awareness regarding risks. This failure can happen at multiple levels, including critical business processes that can overwhelm a technical team's ability to manage risks and manage change effectively.

ERPs Can Take a Long Time to Implement

It can take up to a year to install an ERP, depending on the modules that need to be developed, and then you need to train all of your employees on how to use the system. This process can result in significant downtime and loss of business for your organization.

Without an ERP system, companies waste valuable time pulling together fragmented data from different spreadsheets and sources. By integrating your current systems and work processes with an ERP solution, you can ensure that there will always be one source of all data within your organisation.

Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.

The most effective ERP solutions are modern, integrated suites that offer customers seamless data and process integration. A complete solution unites management processes across the organization, giving leaders visibility and insight into all aspects of the business.

Who will benefit from ERP? ›

Oracle ERP Cloud can be purchased in three pricing plans, which are based on product features. A Financial Reporting plan comes for $175/month. Its Advanced Financial Controls plan for $80/user per month, while an Advance Access Control package is priced at $150/user per month.

QuickBooks is not an ERP because it provides only accounting functions — just one of the components of an ERP system. ERP systems help businesses manage a wide variety of business processes, including sales and marketing, production, inventory management, procurement and more.

The overall cost of a custom-made ERP solution depends on the number of included modules and usually varies from $45,000 to $250,000.

Oracle ERP Cloud

You can integrate the system with your current SaaS software solutions and leverage a range of Oracle technologies to gain a single view of business workflow. Pricing starts from $175 USD/user/month.

Pricing for Oracle's Enterprise Resource Planning Cloud service: $625 per month or $7500 per year.

Without an ERP, odds are good that your business relies on various software integrations to streamline data and access it cross-departmentally. But integrating multiple applications isn't cheap.

ERPs are a single integrated system, making them less vulnerable to human error. On the other-hand, Excel is an extremely manual tool. Instead of being centralized and integrated like an ERP, multiple departments within your organization will rely on different sets of Excel spreadsheets containing the same data.

Microsoft is one of the world's leading providers of enterprise resource planning (ERP) software, thanks to its Dynamics 365 ERP.

Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations.

What is the most expensive ERP software? ›

Sage ERP solutions is one of the most expensive on the market, with ERP costs of $2600 per month, but this price accounts for three users.

NetSuite implementation costs can be between $25,000 – $100,000 depending on factors such as complexity, modules selected, company size, and more.

ROI of ERP FAQs

The formula to calculate ROI is as follows: (total value of investment - total cost of ownership) / total cost of ownership) x 100. The higher the ratio, the higher the ROI.