How Much Does ERP Cost? Our 2024 Pricing Guide (Avoid Hidden Costs!) (2024)

You’re here because one of the most important factors when considering anew ERP system is understanding thecost.

However, comparing ERP costs between products and vendors can be challenging. Costs can vary greatly depending on factors such as the size of your organization, the specific features and functionality required, and the vendor orprovider.

But don’t let that discourage you. An ERP system can provide significant, long-term cost savings and increased efficiency for your organization, making it aworthwhile investment.

That’s the meat of it, but there is alot more tocover.

We will begin by comparing the price ranges of the leading ERP systems, followed by acomparison of different pricing and deployment models. Lastly, we will discuss how you can maximize your ROI and outline the various factors that impact the total cost of ownership (TCO) of an ERPsystem.

It’s important to remember that knowing your business requirements is crucial in estimating the cost of an ERP system. Additionally, consider the ERP implementation costs and the ongoing support and maintenance costs when evaluating the overall cost of an ERPsystem.

If you’re looking for ageneral idea of how much an ERP system costs, this section will provide you with high-level information on dollar amounts. However, it’s important to keep in mind that the cost of an ERP system varies widely and is influenced by several factors, including company size, number of users, level of customization and required ERP modules. The prices provided here are just general ranges based on aselection of products and should not be taken asdefinitive.

Epicor Kinetic offers acomprehensive solution for manufacturers worldwide. Suitable for small emerging businesses up to large multinationals, the scalable and modular offering includes supply chain management, manufacturing execution, project management, financial management, and much more. It offers quick ERP implementation that can easily expand as your manufacturing process grows. It’s cloud or on-premise deployable. Subscription-based pricing starts at $125 per user per month. The minimum ERP implementation cost is $50,000.

EnterpriseIQ is designed for mid-sized and large organizations. It offers features including manufacturing and quality management, financial management, and supply chain management. It is available in acloud-based or on-premises version. Costs depend on users and features, and they generally range from $25,000 to $300,000.

Global Shop Solutions is designed for manufacturers. Its base features include financial management, supply chain management, and manufacturing management. It is available in acloud-based or on-premises version. Pricing requires acustom quote, and the minimum ERP implementation cost is $20,000.

IFS Applications 10 is designed for large organizations. It offers an integrated solution for enterprise resource planning, supply chain management, and enterprise asset management. It is available in acloud-based or on-premises version. Pricing can vary significantly, from around $300,000 to $2,000,000. The minimum ERP implementation cost is $300,000

Infor CloudSuite is designed for mid-sized and large organizations. It offers popular features such as financial management, supply chain management, and enterprise asset management. It is acloud-based system that can be accessed from anywhere with an internet connection. Prices start at $150/mo for eachuser.

Microsoft Dynamics 365 Business Central is acloud-based ERP solution that integrates finance, operations, sales, and customer service into one system. It offers acomprehensive toolset for managing financials, supply chains, operations, and customer relationships, with integration to Microsoft products like Office 365, Power Apps, and Power BI. It aims to provide efficient, effective operation management through its user-friendly interface, customizable dashboards, and mobile access. The cost is around $75/mo per user. The minimum ERP implementation cost is $35,000.

NetSuite ERP is designed for small and mid-sized organizations. It offers awide range of features, including financial management, supply chain management, business intelligence reporting, and CRM. It’s acloud-based system accessible from anywhere with an internet connection. The starting price for amonthly subscription is $99; however, the final cost will depend on the chosen solution. The minimum ERP implementation cost is $10,000.

Sage X3 ERP is designed for mid-sized and large organizations, and it offers awide range of features, including financial management, supply chain management, and CRM module. It is available as acloud-based system or on-premise ERP solution. On-premises pricing starts at $25,000. Cloud-based pricing starts at $75/mo per user. The minimum ERP implementation cost is $100,000.

SAP Business One is designed for small and mid-sized organizations, with features including financial management, supply chain management, business intelligence, and CRM modules. It will cost around $5,000/mo per user, and the minimum ERP implementation cost is $50,000.

Syspro is designed for small and mid-sized organizations. It offers awide range of features, including financial management, supply chain management, and CRM. It is available in acloud-based or on-premises version. The base cost for SYSPRO ERP is $199 per user per month. However, as additional modules are added, the overall cost of the program will increase. The minimum ERP implementation cost is $25,000.

It’s best to compare ERP systems and get customized price quotes from the vendors directly for more accurate pricing for your specific needs. Every ERP implementation is different, and those costs can vary, as we discussbelow.

Enterprise Resource Planning (ERP) software is designed to manage and automate various departments and operations of abusiness. The main goal of an ERP system is to streamline and integrate specialized business functions into acohesive and connected system. This includes managing areas such as accounting, inventory control, human resources, and customer relationship management.

But with all the different software systems available, why should abusiness invest in an ERP system? For starters, an ERP system can save complex businesses alot of time and money. By automating repetitive tasks and providing real-time data, ERP systems can help businesses make more informed decisions and operate more efficiently.

The biggest benefit of ERP systems is that they help businesses grow. With agood ERP system in place, companies can scale their operations more efficiently and respond to changes in the market more quickly. And as abusiness grows, agood ERP system can also scale to accommodate more users, functionalities, anddata.

Before investing in an ERP system, or upgrading to anew one, it is important to consider the associated costs. This guide lays out the various factors that impact ERP pricing and suggests how to calculate the total cost of ownership (TCO) so you can find anew ERP solution that fits your budget. Let’s dive in and learn more about ERP systems, how much they cost, and why the right system can be agreat investment.

The Factors that Affect the Price ofERP

When selecting an ERP system, various factors should be considered when assessing the cost. These include pricing models, implementation and customization fees, training costs, the number of users, total business transactions, and any hiddencosts.

Cloud-based ERP implementations have lower upfront costs as no hardware needs to be purchased. However, long-term ongoing costs may be higher with cloud-based subscription fees for software andhosting.

On-premise ERP implementations may involve ahigher upfront cost but offer more control and customization options as well as potential long-term savings. It is important to consider the organization’s specific needs and budget over time, before deciding which type of ERP toimplement.

Common misconceptions about ERPpricing

There are afew common misconceptions that can lead to pricing confusion when selecting an ERP solution. Let’s set the record straightbelow:

• ERP systems are too expensive: Despite being asignificant investment, ERP software should save your business time and money in the long run through efficiency and growth. It’s important to consider the potential return on investment (ROI).
• All Enterprise Resource Planning system costs are similar: Not true anymore! With the advent of newer systems in the last 10years, ERP costs have become more competitively priced and can vary widely based on features and functionality and vendor, so it’s essential to shop around and compare different vendors as well as differentproducts.
• 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 ofsupport.
• An Expensive ERP solution is better: In reality, some expensive systems may have limited or rigid features that require costly customizations, while more affordable systems may offer advanced and flexible capabilities in comparison. We encourage you to evaluate afew newer systems along with well-known brands. Consider your organization’s needs first, then compare at least 8 – 10 ERP systems (from different vendors, if possible), in the correct ERP tier, to find the bestvalue.
• ERP pricing is non-negotiable: Not always — some vendors offer flexible pricing options that you can tailor to your organization’s needs. Ask about different options and be prepared tonegotiate.

When researching ERP solutions, make sure to evaluate all of your options and understand the associated costs before making afinal decision. By being aware of common misconceptions and asking the right questions upfront, you can find the best system at the right price for yourbusiness.

Comparing the costs of ERP systems can be challenging, especially if you’re considering different types of licenses or deploymentmodels.

ERP system pricing models can range from simple to quite complex. Therefore, it is essential to understand how different solution providers calculate their proposedcosts.

Usually, it is acombination of several different cost elements, so it’s crucial to get familiar with all the components. Doing so will enable you to choose the best system for your business. Following is aquick summary, but we also dive deeper into this topic in our related post ERP Pricing Models: How You Pay For ERP Software.

User-Based ERP SoftwarePricing

When it comes to ERP software pricing, user-based models are the most common. As you add more employees or expand implementation, your user count and costs rise. Understand how users are counted – e.g., concurrent vs. named – before deciding on how many youneed.

Skimping on users can limit the value derived from the application, so make sure to understand what is being offered now compared to what you had before if you’re replacing an existing ERPsolution.

• Concurrent ERP Users: Counts users logged into the application simultaneously and can be policed by built-in mechanisms. This is an effective way to keep user numbers in check when workers are distributed around the world, but each user will generally have ahigher price compared to namedusers.
• Named ERP Users: Identify each user with their own login credentials. Two people with the same ​“name” can’t log in at once, even if only ten other named users areactive.
• Full or Limited Users: Generally, full users have access to all functions of the application, whereas limited users may only have access to specific inquiry-only functions or selected types of transactions.

ERP Software ModulePricing

Most Enterprise Resource Planning (ERP) solutions are suites of modules, such as general ledger, accounts payable, order management, accounts receivable, inventory management, and purchasing. These modules can be packaged and licensed individually ala carte, or grouped together (e.g., accountingmodules).

Paying aprice for the different modules is often used in conjunction with user-based licensing, where you might pay amodule fee plus users, or users might be confined to specificmodules.

It’s crucial to carefully examine the contents of your subscription or license, both in general and for each user. You should think about whether you’ll need to pay for more users after expanding the scope of your ERP implementation process or if there will be an extra fee permodule.

Pricing by both module and user is favorable as you pay only for what you use; it also helps to maintain some cost control. However, it can limit growth as the cost escalates when adding functions and/or users — even when they become critical to success. All-inclusive licenses or subscriptions offer customers flexibility and full access to all features and functions, which yields more usage and overall value of thesystem.

Enterprise ERP SoftwareLicenses

An enterprise license is typically negotiated for aset period, usually ayear. Each vendor uses their own formulas for determining the licensing fees, so it’s important to read the small print and know what you’re getting. Licensing fees are often based on the type and number of functions used (modules, groups of modules, and extensions), the size of the business, and the number of users. The major advantage to this kind of license is its predictability over the term – it doesn’t limit the amount or type of functionalities available.

Resource/Usage-Based Pricing of ERPSoftware

ERP vendors typically use acombination of pricing models, but with SaaS emerged anew option that’s based on the consumption of resources, called usage-based pricing. This includes computing power, network bandwidth, and data storage. Usage-based pricing is estimated based on factors such as function requirements, company size, number of users, and amount of business transactions and may be tailored to suit one’s needs. ASaaS environment can accurately measure the actual usage of resources in real-time, making it agreat ​“pay for what you use”option.

ERP Implementation Costs Vary by PricingModel

ERP installation costs can vary depending on the pricing model chosen. Factors such as additional fees for implementation, training, and ERP customization services should be taken into account when selecting apricing model. Cloud-based systems tend to have lower implementation costs than on-premise solutions. To ensure you make an informed decision, make sure you understand all costs associated with the pricing model, including any hidden fees. Agood ERP provider will help you compare different pricing models and pick the one best suited to your organization.

For businesses responsible for purchasing decisions, understanding the different ERP deployment models and associated costs is essential. While users may not have to worry about deployment options and payment methods, decision-makers need to understand the financial implications of theirchoices.

On-premise solutions require upfront capital expenditure for hardware and infrastructure, while cloud-based models involve subscription fees based on usage rates. Hybrid deployments offer acombination of both on-premise and cloud hosting options but with higher initial setup costs. Knowing the total cost of each model can help businesses make an informed decision that fits their budget and requirements.

The chart above is from the following research paper Cloud versus On-Premise Computing.

Costs to Consider for On-Premise ERPSystems

The first deployment model is on-premise, where businesses own and maintain all hardware, software, and related services onsite. This model presents acapital expense upfront, as businesses need to purchase their own hardware and infrastructure components before getting started. Additionally, businesses should allocate abudget for ongoing costs associated with maintenance updates and patches needed for their customizedsetup.

Cost Factors for Cloud-Based ERPSolutions

The second deployment model is cloud-based. This option requires lower upfront costs while allowing businesses to benefit from economies of scale by sharing resources with other users. When working with cloud ERP solutions, companies will pay subscription fees based on their chosen platform’s usage rates rather than invest in capital expenditures. Maintenance costs are usually included in these subscriptions but may vary depending on the level of service you require from yourprovider.

Cost Considerations for Hybrid ERPDeployment

The last model is hybrid deployment, which combines elements from both on-premise and cloud solutions by using acombination of local hardware and cloud-based services. This provides many benefits but also presents ahigher initial cost for integration since both parts need to be set up separately compared to the single setup you get with either an on-premise or full cloud solution. Maintenance costs for this option can also be higher since multiple systems will have to be maintained simultaneously by external providers if you do not have sufficient internal IT resources availablein-house.

No matter what type of ERP deployment model you choose for your business, understanding the different costs associated with each can help you make an informed decision that suits your specific requirements while helping you stay withinbudget.

For businesses looking to maximize their return on investment from anew ERP system, planning ahead and understanding what’s involved is essential. Let’s look at how you can ensure your ERP implementation is successful and cost-effective.

Here are 5ways to maximize ROI when purchasing an ERPsystem

1. Establish clear success criteria: Define what success looks like for an ERP system implementation and ensure all stakeholders agree on thegoals.
2. Choose wisely: Select an ERP solution that fits the needs of your business, as opposed to one that requires extensive ERP customization or rewriting ofcode.
3. Plan ahead: Get acomprehensive understanding of the services and costs associated with the project, and include any necessary expenses in thebudget.
4. Invest in employee training: Implementing anew ERP platform can involve complex tasks, so ensure employees have been appropriately trained to decrease implementation time and maximize efficiencygains.
5. Monitor progress: Regularly monitor progress throughout the ERP implementation phases to identify potential issues before they arise and focus resources on quick solutions ifneeded.

Avoid Hidden Costs Of Customization

The best way to prevent the need for costly customization is to select an ERP solution that fits your needs instead of fitting the system to your needs by rewriting it. Does this mean you should never customize ERP systems? No. It just means you should never touch the source code. Selecting asystem that requires many customizations to the source code will not only build barriers to future innovation but also add recurring additional costs to the project scope. Fortunately, with the many ERP products and options available today, there should be several affordable systems that fit your needs without requiring drastic customizations.

The split between upfront and recurring payments will vary significantly depending on whether you are buying alicense to run on-premise ERP or subscribing to ERP Software as aService (SaaS). Seven years is quite often the break-even for on-premise and SaaS. However, companies are more likely to use afive-year planning horizon. If so, it may make more sense to instead look at the five-year cost of ownership of yourERP.

To get areasonable comparison, estimate what you will pay over whichever time period you choose, and then divide by that number of years to get an average cost per year. That way, you will get alike-for-like comparison of prices, even when comparing very differentoptions.

The total cost of ownership can be broken down into four general categories: ERP software, maintenance, hardware, staff, andservices.

ERP SoftwareCost

Obviously, the cost of the ERP software itself is asignificant component of the overall TCO, and many other costs are related/dependent upon the price of the software. For example, in the traditional on-premises world, ongoing maintenance is often priced as apercentage of the ERP software cost. More indirectly, the complexity of the software will also impact the level of support servicesneeded.

In some instances, the application price is all-inclusive. Still, in other cases, you may also need to purchase middleware separately that is part of the platform/architecture on which the application isbuilt.

For perpetual license on-premises ERP software, the cost is front-loaded, typically regarded as acapital expense (CapEx). Where ERP software is delivered as aservice (SaaS), the cost of the software is most often asubscription, which is arecurring expense that can be accounted for as an operating expense (OpEx).

Maintenance

Maintenance is arecurring ERP cost that provides you access to technical support, bug fixes, and upgrades to the ERP software system. This is acost element that is primarily associated with software that is licensed and run ​“on-premises.” Where software is delivered as aservice (SaaS), including cloud ERP software, technical support, bug fixes, and upgrades are included in the subscription.

Staff

There are direct and indirect staffing costs associated with ERP. On the direct side, you may have employees assigned directly to support your business operations. These may be dedicated to ERP full-time, or they may support multiple applications. These tend to be Information Technology (IT) staff, but you may also employ some ​“super users” with skills that are more business than technology oriented. The burdened cost of any of these dedicated individuals contributes to theTCO.

On the indirect side, you may be able to reduce headcount through efficiencies and automation. If, in fact, you can reduce staff (typically clerical staff), this should directly offset the TCO of ERP. However, more likely, you will be able to free up employees from repetitive, menial tasks for them to work more strategically and add more value. These cost savings may not directly impact TCO but contribute to your return on investment (ROI), which is equally important. This is also harder to quantify, but simple growth statistics without added headcount can be ahelpful metric.

Services

The type and volume of services you need to pay for will vary quite significantly, depending largely on the complexity of your business and your installation/implementation.

The kinds of services you may needinclude:

• Evaluation andselection
• Business process design, which should include mapping business processes to your new ERPsoftware
• Assistance in configuration/setup
• Data migrationassistance
• Education andtraining

These all contribute to the total ERP cost. And don’t forget the one additional service that has historically added significantly to the TCO that you should avoid entirely. That is any invasive customization that involves code changes to the ERP software as we discussedabove.

Step one is to know what you need and what problems your system should solve. Once it’s determined which features are needed, you can begin to assess which systems work well for your needs, and then narrow by those that fit your budget. Researching vendors and their offerings, prices, and customer service options will help you make amore informed decision. But the best and final cost assessment will come after you have met with the vendor to discuss your project indetail.

When in discussions with sales representatives, don’t forget to factor in any long-term costs associated with the ERP system, such as maintenance fees, upgrades, employee training, and consulting services. Additionally, make sure it’s asystem you won’t outgrow in 5years. With some thorough research and thoughtfulness when making your selection, you can find an ERP that fits your budget and start to have deeper conversations with those that sell and supportit.

Gut check priceupfront

A real quote will not be possible until the potential vendors have athorough understanding of your needs, but you should ask for ageneral ballpark estimate upfront. It makes no sense to invest time and effort evaluating asolution that is clearly out of your price range. Ask the vendor what the minimum fee to implement is, for your employee and revenue size. You may have to estimate the number of users and identify which functional areas you want to address (e.g., departments in your organization), but with that, the vendor should be able to give you asolid range. Also, ask for the average cost ratio of services to software. Should you expect to pay $1 for service for every $1 you spend on software? More? Less? priced as apercentage of the ERP softwarecost.

Comparing prices of ERP can take alot of time and effort, especially considering different types of licenses or deployment models. With so many different variables, it can be hard to create areasonable and accurate ERP budget. But here, we’ve at least given you astarting point. At Top10ERP, we understand the challenges and have built our helpful ERP comparison tool that allows you to compare ERP pricing options side-by-side. You can also quickly request demos and customized ERP pricequotes.

Selecting an ERP system is amajor investment. Understanding the costs is crucial. This FAQ can help guide you through theprocess.

We answer common ERP pricing questions. Get insights on pricing models. Learn about total cost of ownership. Find out hidden fees to watch for. Get tips for choosing acost-effective solution.

Whether it’s your first ERP or an upgrade, this can help. Read on for key information. Make sure you find an ERP with maximum ROI. One that sets up your business forsuccess.

Is it possible to try ERP software before buyingit?

Yes, most ERP vendors offer demos or free trials for their ERP software. This allows you to become familiar with the software user interface and features without spending any money. You can compare different software demos and see if one feels right for your needs. In fact, to simplify your search, you can compare multiple ERP systemsand request their free ERP demos directly from our site with one simple request, instead of having to hunt down each vendorseparately.

Is ERP software worth thecost?

At Top10erp​.org, we have witnessed firsthand how ERP (Enterprise Resource Planning) software helps businesses to achieve greater efficiency by streamlining business functions, improving inventory management, and automating processes. Our goal is to help businesses find the right system to grow and succeed. ERP systems have many benefits and can improve acompany’s profitability over time. When the right system is selected, it provides agreat return oninvestment.

Why is ERP software soexpensive?

ERP systems are costly due to their complexity and require ongoing maintenance, updates, and support. Mobile ERP, customization, and scalability for growth add to the costs. However, ERP improves efficiency and processes, providing acompetitive edge despite the costs. Cloud ERP eliminates hardware costs but has subscription fees.

How much does asmall business ERPcost?

The cost of an Enterprise Resource Planning (ERP) system for asmall business will depend on the type and complexity of the system. Generally, you can expect to pay anywhere from afew hundred dollars per month for online packages, to tens of thousands of dollars for more comprehensive solutions. The right ERP can save your business time and money in the long run by streamlining processes and increasing efficiency. For asmall manufacturing business see our post on the best ERP systems for small manufacturing businesses. And you can also see comparisons for small businesses in our ERP comparison tool.

What is the best-priced ERP system for amanufacturing company?

Ultimately, the best-priced ERP system for amanufacturing company will depend on the specific needs, industry, size, and budget of the business. Before choosing an ERP system, it’s important to thoroughly research the options and assess their features, pricing, and support to determine the best fit for your business. You can also read our general guide to selecting manufacturing ERP systems. We provide the Top10erp​.org site information to support your ERP research. Should you wish to speak with us for recommendations, and get pointed in the right direction, please reach out to usdirectly.