Having a company or business is a responsibility for anyone who wants it. It may be the case that some people have more facilities than others, but at the end of the day it is a huge responsibility to be aware of everything that comes with having an organization.
For the tasks that have to be executed, it is always necessary to have everything organized and to maintain a control to supervise all the areas. This is often difficult for many entrepreneurs and can lead to long-term problems in an organization.
The tasks that are usually divided into areas are sometimes not enough for everything that has to be done and the people in charge to complete the roles. For this type of problems, software has been created that help a lot to the development of the company and leads to a better development.
These softwares, known as ERP, help to automate and manage most of the business processes of the different areas of a company: manufacturing, human resources, finance, marketing, customer service, logistics, among others. ERPs are integrated by several modules that correspond to each department of the organization and these are connected to each other to establish a fluid exchange of information that will be developed from the beginning to the end of the business process.
There are ERPs for all types of companies, the options are so many that can cost from 0 to 200,000 euros, without considering large companies. But before choosing the best ERP alternative, it is necessary for the user to know what investments must be made before and during the acquisition of an ERP, to finally search and compare different prices of ERP types.
This guide is intended for those companies and businesses that know the advantages of incorporating an ERP system, but do not know the approximate costs of these softwares. Thanks to this guide you will be able to know the benefits of incorporating an ERP, the factors included in the definition of prices and the price ranges of ERP systems.
Benefits of ERP
Before starting to explain the investments that should be made for the acquisition of an ERP system, we will provide you with a list of the benefits that a company obtains when implementing one of these softwares.
Improved decision making
Improves the decision-making process by gathering and unifying all the company's information to create a reliable database that accurately shows possible future scenarios.
Avoidance of duplication
The heads of the different departments of the organization will have real-time access to the same information provided by the ERP software, thus avoiding duplication of records and operations.
Increased scalability
Each company will be able to contract those functionalities or modules that are needed at different specific times and have the option of contracting additional modules if required.
Adaptation to the specific needs of all companies.
When an ERP system is being implemented or changes are to be made, the supplier company can configure it to adapt it to the specific needs of the company.
Greater control and traceability
ERP software collects all the data of the business activities, in order to control the transit of products through all the elements of the value chain.
Increased information security
Thanks to its different levels of access or authorization and automatically generated backups, it will be more difficult for users to try to steal important information from business processes.
Improved efficiency and operational capacity
The automation of business activities significantly eliminates the possibility of errors associated with the human component, since some of these activities were previously performed manually. In this way, the company will improve its operational capacity, will be able to serve more of its customers and will be able to manufacture even more products.
Increased profitability
The best ERPs provide greater efficiency, reduce errors and eliminate duplications, thus generating significant cost reductions and important improvements in the company's performance and the benefits it obtains. This is how ERP software increases profitability.
How close is the investment?
Undoubtedly, if you want to have a digital tool to help you in your business, it is a considerable investment. When you have a business or you are thinking of having one you have to take into account many benefits, profits, but also the part that perhaps many do not like: the investment.
You may think that you need a lot of investment to have these tools, perhaps much more than you thought. It is possible to think that to have these tools is to attribute a money that for many companies is not an option due to lack, but it is not necessarily so. There are affordable prices to others that really have a high price, but it all depends on what they offer.
If this type of tool is not incorporated in the long term it can be detrimental because it has many functions that most companies are acquiring to optimize their performance.
In addition, the investment can also help the human aspect, where it can improve the internal climate of the organization thanks to the help in processes that are usually automated.
It can cost a large investment, almost like the initial investment of a house, part of the purchase of a cell phone or paying a large amount to a bank, but it is worth it, and you can start with those of less investment and that are better suited to the main needs of the company.
What does the investment consist of?
First of all, as you know, it is not usually a small investment, but anyway there is a division of investments that must be made before and during the acquisition of an ERP for your company. The investments that directly influence the final price of an ERP are the following:
Specialist consulting
This is the most expensive investment in the budget; it usually costs up to half of the total. Consultants are important people who will support the company from the beginning to identify the best ERP and advise for a good implementation. This investment includes analysis, extraction of data from the company and some advice to the employees of the organization so that they are familiar with the tools to be implemented. There are many off-the-shelf products available today that help users save this expense, but most organizations at some point will need the support of a consultant.
Per-user licensing
This cost can be a third of the investment, depending on what type of license is chosen as there are monthly or annual. Above all there is a difference in the cost of these licenses by the number of employees that make up the organization.
Hardware
If you wish to acquire an On-Premise ERP solution, then a part of the total budget will be spent on the purchase of a basic IT infrastructure: a server where the software will be installed, a database where all the company's information will be managed and a backup system that will protect the information of the processes. Also included in the infrastructure is the LAN connection that allows a high volume of data generated by the use of the ERP or the computers of each user. If a cloud ERP is chosen, these costs will be included in the license price.
ERP maintenance
Once an ERP system has been incorporated in a company, it will need a maintenance service that includes aspects such as updates, correction of specific failures, resolution of technical problems and management of the company's growth in the event that it is necessary to acquire more functionalities. Basically this work is performed by the same company that provides the ERP software and is charged by an annual fee of up to 15% of the total price of the license. It is also possible to hire a specialist to take care of ERP maintenance in-house.
However, there are sometimes other costs that are not taken into account during ERP implementation that can directly affect the total budget. Among these costs, also known as hidden costs, we can find the following:
The best ERPs are not only defined by their cost. Within the market it is possible to find good alternatives at affordable prices, everything will depend on the needs of the company. There are several types of ERP for freelancers, small and medium-sized companies with affordable prices and there are even free options, as well as specialized ERP's for different areas or sectors, such as ERP for consulting firms, ERP for manufacturing, projects, construction companies, sales, etc. It is necessary to evaluate the prices of ERP's for small and medium-sized companies in relation to their benefits and functionalities. We can establish several ERP price ranges:
From 0 to 6,000 euros: economical solutions for small or start-up companies. There is little advice from the supplier and it is the company itself that must have the necessary technical knowledge to implement it.
A cloud ERP system consists of a series of business management tools and applications that allow users to access their database over the Internet. This type of ERP is characterized by eliminating the expenses related to the installation process, configurations and maintenance of programs and servers, which generates a decrease in the initial investment for the acquisition and implementation of the system. In order for customers to access the servers they must first rent them through a monthly or annual subscription, have a stable wifi connection and have a device through which to log in such as a computer, laptop, tablet or cell phone.
With the emergence of online ERP's the market has opened up a lot thanks to the benefits it gives its users. As all your IT resources are stored in remote centers, users can connect and get information through various mobile devices with internet access from anywhere and anytime. If you want to try your luck implementing this type of ERP to manage all areas of your company, then you can review the different alternatives of ERP's in the cloud whose price ranges are from 20 euros per user per month.
A great alternative as a cloud ERP is Sage 200. This powerful business tool allows you to lighten the activities of our business carrying out a simpler and more efficient management. This modular and customizable solution was designed to adapt to the specific needs of all SMEs regardless of the sector in which they develop. From 200 euros per month it is possible to carry out a basic configuration of the program and access its wide range of connected solutions to work with both customers and suppliers.
If you are looking for another ERP solution in the cloud aimed at small and medium-sized companies, then the most recommendable is Ekon. Ekon is presented as a flexible platform that guarantees the transformations required by a company and is easy to integrate and implement. Its user-friendly control panel, its alerts, its list of tasks and the possibility of using it from any place and device, has generated that several users have a pleasant experience with the system. The value of Ekon is approximately 25,000€, a rather high price but that will allow you to enjoy the multiple services it offers.
You can also opt for the A3ERP software. This ERP system is intended for SMEs and is responsible for ensuring the control of all production and administrative processes of the company. The design of A3ERP is based on three key points: optimization of resources, simplification of processes and analytics for decision making. If you acquire this software, you will have an intelligent assistant that will provide you with all the actions and information you need to manage your company, you will have in the same database all the information generated by all the modules of the organization and you will be able to save in extra expenses of resources for the implementation of the system. The investment you must make to acquire this system is around 65.00€.
What payment methods are available?
Cloud ERP vendors set their prices based on multiple factors such as number of users, amount of data, transactions, among others. The most common pricing models are usually monthly or annual.
Annual license fee: The ERP installation has a cost, to which license and annual maintenance costs are added. By paying for this license you can access new versions of the software, and its extended and/or additional services. All this implies a price of approximately 15 to 30% of the total price of the system.
Monthly license payment: The cost is paid monthly as stipulated in the purchase contract, but this may vary depending on the vendor or the software. It is more common in online ERP solutions, which includes 24-hour technical support to solve different problems related to usage errors, infrastructure problems or inherent software failures.
Cheap ERP
Another very valid option is to opt for cheap ERP, these are management programs aimed at smaller companies, such as small businesses or start ups, even medium-sized companies. The cost can be located in a range of 0 to 600 euros. You will find many ERPs aimed at companies in different sectors, with more than enough management capabilities and functions to achieve amazing results.
How to implement an ERP?
The implementation must be done with great care, the process that consists of stages and steps, requires special attention because it is in this that will define the proper functioning of the program. Among its stages are planning, organization, adjustments, controls, etc.
For the tasks that have to be executed, it is always necessary to have everything organized and to maintain a control to supervise all the areas. This is often difficult for many entrepreneurs and can lead to long-term problems in an organization.
The tasks that are usually divided into areas are sometimes not enough for everything that has to be done and the people in charge to complete the roles. For this type of problems, software has been created that help a lot to the development of the company and leads to a better development.
These softwares, known as ERP, help to automate and manage most of the business processes of the different areas of a company: manufacturing, human resources, finance, marketing, customer service, logistics, among others. ERPs are integrated by several modules that correspond to each department of the organization and these are connected to each other to establish a fluid exchange of information that will be developed from the beginning to the end of the business process.
There are ERPs for all types of companies, the options are so many that can cost from 0 to 200,000 euros, without considering large companies. But before choosing the best ERP alternative, it is necessary for the user to know what investments must be made before and during the acquisition of an ERP, to finally search and compare different prices of ERP types.
This guide is intended for those companies and businesses that know the advantages of incorporating an ERP system, but do not know the approximate costs of these softwares. Thanks to this guide you will be able to know the benefits of incorporating an ERP, the factors included in the definition of prices and the price ranges of ERP systems.
Benefits of ERP
Before starting to explain the investments that should be made for the acquisition of an ERP system, we will provide you with a list of the benefits that a company obtains when implementing one of these softwares.
Improved decision making
Improves the decision-making process by gathering and unifying all the company's information to create a reliable database that accurately shows possible future scenarios.
Avoidance of duplication
The heads of the different departments of the organization will have real-time access to the same information provided by the ERP software, thus avoiding duplication of records and operations.
Increased scalability
Each company will be able to contract those functionalities or modules that are needed at different specific times and have the option of contracting additional modules if required.
Adaptation to the specific needs of all companies.
When an ERP system is being implemented or changes are to be made, the supplier company can configure it to adapt it to the specific needs of the company.
Greater control and traceability
ERP software collects all the data of the business activities, in order to control the transit of products through all the elements of the value chain.
Increased information security
Thanks to its different levels of access or authorization and automatically generated backups, it will be more difficult for users to try to steal important information from business processes.
Improved efficiency and operational capacity
The automation of business activities significantly eliminates the possibility of errors associated with the human component, since some of these activities were previously performed manually. In this way, the company will improve its operational capacity, will be able to serve more of its customers and will be able to manufacture even more products.
Increased profitability
The best ERPs provide greater efficiency, reduce errors and eliminate duplications, thus generating significant cost reductions and important improvements in the company's performance and the benefits it obtains. This is how ERP software increases profitability.
How close is the investment?
Undoubtedly, if you want to have a digital tool to help you in your business, it is a considerable investment. When you have a business or you are thinking of having one you have to take into account many benefits, profits, but also the part that perhaps many do not like: the investment.
You may think that you need a lot of investment to have these tools, perhaps much more than you thought. It is possible to think that to have these tools is to attribute a money that for many companies is not an option due to lack, but it is not necessarily so. There are affordable prices to others that really have a high price, but it all depends on what they offer.
If this type of tool is not incorporated in the long term it can be detrimental because it has many functions that most companies are acquiring to optimize their performance.
In addition, the investment can also help the human aspect, where it can improve the internal climate of the organization thanks to the help in processes that are usually automated.
It can cost a large investment, almost like the initial investment of a house, part of the purchase of a cell phone or paying a large amount to a bank, but it is worth it, and you can start with those of less investment and that are better suited to the main needs of the company.
What does the investment consist of?
First of all, as you know, it is not usually a small investment, but anyway there is a division of investments that must be made before and during the acquisition of an ERP for your company. The investments that directly influence the final price of an ERP are the following:
Specialist consulting
This is the most expensive investment in the budget; it usually costs up to half of the total. Consultants are important people who will support the company from the beginning to identify the best ERP and advise for a good implementation. This investment includes analysis, extraction of data from the company and some advice to the employees of the organization so that they are familiar with the tools to be implemented. There are many off-the-shelf products available today that help users save this expense, but most organizations at some point will need the support of a consultant.
Per-user licensing
This cost can be a third of the investment, depending on what type of license is chosen as there are monthly or annual. Above all there is a difference in the cost of these licenses by the number of employees that make up the organization.
Hardware
If you wish to acquire an On-Premise ERP solution, then a part of the total budget will be spent on the purchase of a basic IT infrastructure: a server where the software will be installed, a database where all the company's information will be managed and a backup system that will protect the information of the processes. Also included in the infrastructure is the LAN connection that allows a high volume of data generated by the use of the ERP or the computers of each user. If a cloud ERP is chosen, these costs will be included in the license price.
ERP maintenance
Once an ERP system has been incorporated in a company, it will need a maintenance service that includes aspects such as updates, correction of specific failures, resolution of technical problems and management of the company's growth in the event that it is necessary to acquire more functionalities. Basically this work is performed by the same company that provides the ERP software and is charged by an annual fee of up to 15% of the total price of the license. It is also possible to hire a specialist to take care of ERP maintenance in-house.
However, there are sometimes other costs that are not taken into account during ERP implementation that can directly affect the total budget. Among these costs, also known as hidden costs, we can find the following:
- License extensions that also lead to an increase in the number of users with access to the ERP.
- The repetition and/or reiteration of training due to the slowdown of the implementation process. This slowdown is often caused by personnel changes, attention deficit, etc.
- User overtime for data collection, organization and data entry. And this overtime also includes the process of hiring new staff.
- Constant changes in the formulation of requirements, which forces users to make changes in business procedures and re-entry of data.
- Expansions of new modules during the implementation of the ERP system in the company. The integration of new modules can be achieved with the support of superior or additional services to the service that was initially contracted.
- Development of new IT activities in the software during the sales and analysis phase that are necessary to start up the rest of the operations.
- The hasty migration of obsolete data, caused by the rush to implement a new ERP software and the constant delays of users due to the lack of time to install and prepare the system.
The best ERPs are not only defined by their cost. Within the market it is possible to find good alternatives at affordable prices, everything will depend on the needs of the company. There are several types of ERP for freelancers, small and medium-sized companies with affordable prices and there are even free options, as well as specialized ERP's for different areas or sectors, such as ERP for consulting firms, ERP for manufacturing, projects, construction companies, sales, etc. It is necessary to evaluate the prices of ERP's for small and medium-sized companies in relation to their benefits and functionalities. We can establish several ERP price ranges:
From 0 to 6,000 euros: economical solutions for small or start-up companies. There is little advice from the supplier and it is the company itself that must have the necessary technical knowledge to implement it.
- From 6,000 to 20,000 euros: Professional and recognized solutions where the supplier offers consultancy for implementation in the company.
- From 20,000 to 100,000 euros: Solutions for companies that have clear advantages of an ERP and want to implement a first level one. The cost is high, so it is necessary to be very sure. In addition, it is usually associated with a maintenance contract.
- It also depends on the number of users of the system. Try to adjust it as much as possible to save money. Knowing about how an ERP works and all that it is capable of providing you can make better purchasing decisions.
A cloud ERP system consists of a series of business management tools and applications that allow users to access their database over the Internet. This type of ERP is characterized by eliminating the expenses related to the installation process, configurations and maintenance of programs and servers, which generates a decrease in the initial investment for the acquisition and implementation of the system. In order for customers to access the servers they must first rent them through a monthly or annual subscription, have a stable wifi connection and have a device through which to log in such as a computer, laptop, tablet or cell phone.
With the emergence of online ERP's the market has opened up a lot thanks to the benefits it gives its users. As all your IT resources are stored in remote centers, users can connect and get information through various mobile devices with internet access from anywhere and anytime. If you want to try your luck implementing this type of ERP to manage all areas of your company, then you can review the different alternatives of ERP's in the cloud whose price ranges are from 20 euros per user per month.
A great alternative as a cloud ERP is Sage 200. This powerful business tool allows you to lighten the activities of our business carrying out a simpler and more efficient management. This modular and customizable solution was designed to adapt to the specific needs of all SMEs regardless of the sector in which they develop. From 200 euros per month it is possible to carry out a basic configuration of the program and access its wide range of connected solutions to work with both customers and suppliers.
If you are looking for another ERP solution in the cloud aimed at small and medium-sized companies, then the most recommendable is Ekon. Ekon is presented as a flexible platform that guarantees the transformations required by a company and is easy to integrate and implement. Its user-friendly control panel, its alerts, its list of tasks and the possibility of using it from any place and device, has generated that several users have a pleasant experience with the system. The value of Ekon is approximately 25,000€, a rather high price but that will allow you to enjoy the multiple services it offers.
You can also opt for the A3ERP software. This ERP system is intended for SMEs and is responsible for ensuring the control of all production and administrative processes of the company. The design of A3ERP is based on three key points: optimization of resources, simplification of processes and analytics for decision making. If you acquire this software, you will have an intelligent assistant that will provide you with all the actions and information you need to manage your company, you will have in the same database all the information generated by all the modules of the organization and you will be able to save in extra expenses of resources for the implementation of the system. The investment you must make to acquire this system is around 65.00€.
What payment methods are available?
Cloud ERP vendors set their prices based on multiple factors such as number of users, amount of data, transactions, among others. The most common pricing models are usually monthly or annual.
Annual license fee: The ERP installation has a cost, to which license and annual maintenance costs are added. By paying for this license you can access new versions of the software, and its extended and/or additional services. All this implies a price of approximately 15 to 30% of the total price of the system.
Monthly license payment: The cost is paid monthly as stipulated in the purchase contract, but this may vary depending on the vendor or the software. It is more common in online ERP solutions, which includes 24-hour technical support to solve different problems related to usage errors, infrastructure problems or inherent software failures.
Cheap ERP
Another very valid option is to opt for cheap ERP, these are management programs aimed at smaller companies, such as small businesses or start ups, even medium-sized companies. The cost can be located in a range of 0 to 600 euros. You will find many ERPs aimed at companies in different sectors, with more than enough management capabilities and functions to achieve amazing results.
How to implement an ERP?
The implementation must be done with great care, the process that consists of stages and steps, requires special attention because it is in this that will define the proper functioning of the program. Among its stages are planning, organization, adjustments, controls, etc.