If you are in the initial stages of evaluating enterprise resource planning (ERP) software, you are probably wondering, “How much will it cost my business to get started with ERP?”
Cost is an important factor for any business investing in ERP software. All good business owners will evaluate costs and assess return on investment (ROI) before deciding on a solution.
The startup cost of ERP can vary greatly from one company to the next, depending on a variety of factors. In this article, we walk you through a few key factors used to assess the implementation or startup cost of ERP for your business.
How many different processes are part of your daily workflow? Does your business include manufacturing, service, rebuilds, inventory, point-of-sale, and/or payroll? The value and efficiency of ERP software is quickly realized when varied processes are streamlined into one solution. At the same time, the number and complexity of different processes will also increase setup time as we ensure a solid foundation is in place for your future.
Another key factor is the volume of sales, inventory, and/or work order transactions your business performs daily. Is it a handful, hundreds, or thousands? The transaction load will affect resources needed at startup as going live must not disrupt your workflow or hinder the customer service experience.
Data Size & Integrity
Moving existing data from your old system to the new system is an important step. The cost and effort to import this data varies based on the amount of data to be imported as well as the integrity of the data.
Data is typically exported from your current solution into an Excel/CSV document where you can restructure or clean up the data. The data is then imported from the Excel/CSV document into the Eagle Business Software. These are the records commonly considered for transition:
- Inventory Items
- Inventory Counts and Values
- Accounts Receivable and Accounts Payable
- Basic Sales Transaction History
Multiple Locations or Divisions
Do you have multiple locations, divisions, and/or tax entities? If the answer is yes, we recommend scheduling multiple phases of your implementation and going live with one location/company/division at a time.
Number of Customizations
Many businesses require at least a few small tweaks or custom reports to meet all their unique needs. We recommend that at least 90% of your needs are met right out of the box without additional customization needed. The remaining 10% can be tweaked and customized as needed. The amount and scale of these customizations will affect the costs of your implementation.
Do you have a decision-maker or controller at your business that will be able to own the success of your project? Often referred to as a project lead, this person should be able to invest a significant amount of time for the implementation at your business. A competent project lead will understand your business processes and workflow, be able to make process decisions, have time available for setup, and be committed to putting the ERP solution to work for your business. This is perhaps the single most critical factor to a successful and timely implementation.
There is simply no way around it – an ERP implementation will require a significant time investment from your team. It will also bring change. Is your staff onboard with the software change? Are they willing and able to learn new processes and systems? The change readiness, availability, and skill of your staff team will affect how much training and outside help is needed.
Existing Processes and Systems
Do you already have defined processes and systems in place that are working well? Or are you hoping to develop new workflow and processes for your business? Our team is ready and equipped to help you design and implement new processes. Developing new processes and workflow increases upfront costs but can have a huge return on investment (ROI).
On-Site vs Remote Training
Today, the majority of training is done from a remote setting, with focused on-site training scheduled during implementation. Costs vary based on the amount of on-site training needed.
Number of Concurrent Users
A user is defined as each computer logged into the software The number of concurrent users are the number of computers logged in at the same time.
By now you know that there is a large range of factors that determine the cost of implementing and beginning to use ERP at your place of business. As we have assisted hundreds of small businesses transition to the EBMS solution, these are a few cost estimates that businesses typically incur in the first year of implementation:
- 3-6 concurrent users: $35,000 - $50,000
- 6-10 concurrent users: $40,000 - $70,000
- Over 10 concurrent users: $50,000 - $80,000
Certainly, ERP is a significant initial investment, but with proper implementation and setup, many businesses find that it pays for itself quickly. 0% finance options are also available to spread out the initial cost of the implementation.
Ready to evaluate investment costs? You don’t have to have it all figured out. Start the conversation with a team member and we can guide you through the evaluation process to determine costs for your company.
- 4 Ways ERP Cuts Costs
- Operational Benefits of ERP
- ERP Planning Guide: Does your business have the right tools to grow?