The eBook recently published by Strategic Systems Group (SSG) is an FAQ resource. It provides in-depth answers to “12 Frequently Asked Questions about Enterprise Resource Planning Systems” for manufacturers. Chapter 2 answers these dicey questions:
How Much Does It Cost to Implement a New Manufacturing ERP System? And How Long Does It Take?
You might ask why these are dicey questions. The answer is that most providers are loathed to discuss cost and timing until they’ve had an opportunity to scope out the project. And while this makes a great deal of sense, due to all of the parameters involved in a typical (or atypical) ERP implementation, we’ve decided to be brave and provide some helpful ranges for our readers.
You can download a complimentary copy of our eBook now, or just read on.
It is important to look at all elements of cost when considering an ERP system implementation or migration. Hardware (virtual and physical), software, and services are the most obvious and the most tangible components. However, the less obvious and less tangible elements include factors such as internal resources, time away from day-to-day operations of the business, and unforeseen impacts on product delivery, customer service, and the collection of receivables.
First, let’s look at some software licensing price ranges.
Cloud ERP Licensing – $100-$300 per user per month
Enterprise Software Licensing – $4,000-$5,000 per user
Next, let’s look at the cost of implementation services.
Rock bottom cost for a small implementation – $20,000
Enterprise-level implementation – 1.5 to 4 times the software license cost
Next, let’s look at how long the implementation might take.
A first time ERP implementation could be accomplished in 3 months.
A migration from another ERP system and implementation of the new system could take 6-9 months.
Case in Point
Let’s look at an enterprise-level organization with 60 users. Taking the highest ranges indicated above, at $5,000 per user their software licensing cost alone would be $300,000. Their implementation cost could be as much as 4 times the software license cost, or $1.2 million. Thus, the tangible costs for this project would be $1.5 million. Assuming that this organization is moving from one ERP solution to another, the time to implement would easily be 6-9 months.
Remember, too, that so far, we have only looked at tangible costs. To learn more…
Download a complimentary copy of our eBook now.
Or contact Strategic Systems Group, your one-stop shop for manufacturing ERP. Call 310.539.4645 or email us at firstname.lastname@example.org.