adapted from www.acumatica.com
When purchasing a new ERP system, one of the first questions everyone asks is: How much will it cost? Many factors are involved, from purchasing and installing equipment to configuring the software to ongoing maintenance. But those costs are offset by the savings (a modern ERP system provides your organization. So, the question remains: What does an ERP system truly cost?
True Cost = ROI – TCO
Most pricing models just calculate the initial hardware infrastructure, software licensing expenses, and implementation costs, but do not consider the impact of ongoing operating expenses. In our pricing model, we first look at the potential cost savings or Return on investment (ROI) the system will offer you, and then turn our attention to the Learn more on TCO in this guide Total Cost of Ownership (TCO). This will give you an accurate picture of how much you should expect to pay for a typical ERP system for mid-sized organization as well as the ROI the system will provide over time. And this process works for any ERP system, not just ours, so you can compare us to our competitors.
Return on Investment (ROI)
Some results can be hard to measure, such as improvements in employee satisfaction and teamwork. Even customer satisfaction can be difficult to truly measure. However, some industry experts have supplied benchmarks that can be useful in estimating typical results. Visit here to explore your possible ROI.
Total Cost of Ownership (TCO)
The software license fee is not the cost of the software. The total cost of owning and maintaining the system over the 7 to 10 years expected life includes a great deal of “hidden” on-going people costs, plus your annual maintenance fee. That fee is typically about 18% of the current list price of the software every year. This means you are repurchasing your system every 5.5 years. This annual maintenance fee gives you the unique opportunity every year to:
- Maintain your current legacy ERP system and receive no additional business benefits. We call this “The Cost of Doing Nothing”.
- Replace your current system with a modern ERP system and start realizing the additional benefits of increased ROI.