How much does an ERP system actually cost?

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Enterprise Resource Planning (ERP) systems are significant investments that can maximise your Return on Investment (ROI). Investing in an ERP system is not a decision that should be taken lightly, as the implementation comes with a high initial cost. But this has a long-term benefit of streamlining business processes and maximising workflow efficiencies. Before reading this, we recommend reading: When you should upgrade to an ERP system? to determine if your business would benefit from an ERP system.

Each of the “costs” of a system should also lead to a benefit, so the rule of thumb would be: if you can’t realise the benefit, then reduce the scope or the cost.

The key costs for ERP implementation are: software licensing fees; additional servers and/or hardware; ERP features and customisation; data transfer and conversion to the new system; testing; training; and support post-implementation. You should obtain a budget from your software provider to find out the cost of ERP implementation. This will help you forecast financial projections, labour cost reduction after ERP implementation and determine the expected ROI.

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