The cost of an ERP implementation

Companies need to keep their software up to standard in order to remain competitive. They may need new software upgrades to improve efficiency in their operations, manage production better, and improve accounting systems, HR, CRM systems and much more. This is where Enterprise Resource Planning comes into play but how much does this cost? To answer this businesses need to look at factors like:

• Company size

• The type of solution that is needed

• The resources needed

• The need and level of customization

• The extent of use

• Maintenance

• Upgrades and other factors

In most cases, if most all, more money will be spent on employees getting on the system, and external consultants. A typical ERP cost distribution is structured in this way: 30% goes towards the software, 10% goes to the database and management of the system, 20% goes to the infrastructure that is required and the rest goes to human resources.

There is no precise way of calculating how much a typical ERP will cost but studies suggest that the cost may range from $50,000 to $500,000 for small to medium sized business and it could go from $500,000 to $5 mill for medium to large enterprises. Business enterprises are unique and they will have unique ERP needs coming with a precise number virtually impossible but we can already surmise that the bigger the enterprise the higher the cost.