How Much Does an ERP System Cost? 2020 Pricing Guide

For any business investing in an enterprise resource planning (ERP) system, pricing is an important factor.

ERP software isn’t cheap, and prices vary depending on the type of deployment, number of users and level of customizations.

Some vendors publicly display pricing on their website, especially for cloud ERP solutions, while others only provide a quote after finding out a company’s business requirements.

We’ve put together this detailed guide on the various ERP pricing models, implementation costs and examples of popular ERP vendor pricing.

BetterBuys ERP Review

What Is an ERP?

An enterprise resource planning system helps organizations manage business functions and streamline operations with a centralized database and a user-friendly interface. Companies use ERP software to standardize business processes, collect operational data, improve supply-chain efficiency, promote data-driven strategies and increase collaboration between departments.

ERP systems are comprehensive solutions that typically include the following modules:

Accounting and Finance – The accounting and finance module tracks the company’s finances, including budget and expense planning, core accounting, revenue management and tax management.

Customer Relationship Management (CRM) – With the CRM module, businesses can manage their client-facing operations, such as sales, marketing and customer service. Employees can track sales prospects and customer pipelines. Users can also manage marketing tasks, including advertising and lead generation campaigns.

Supply Chain – The supply chain module tracks products from manufacturing to warehouse to distributors to customers. Features include supplier scheduling, purchasing, inventory, claim processing, shipping, tracking and product returns.

Inventory Management – Using the inventory management module, businesses can monitor materials and supplies through inventory control, purchase orders, automatic ordering and inventory scanning.

Manufacturing – Manufacturers and other production-oriented facilities can use the manufacturing module to manage their shop floors, looking at elements such as work orders, bill of materials, quality control, engineering, manufacturing process and planning, and product lifecycle management.

Human Resources – The human resources module helps organizations manage their hiring cycles from recruitment to succession. Companies can take advantage of the following features: applicant tracking, payroll, time and attendance, performance management and learning management.

Business Intelligence – A business intelligence module collects and analyzes data from multiple sources and helps users make better business decisions. Some features include customizable dashboards and visualization tools, ad-hoc and scheduled reporting, and real-time data access.

ERP System Pricing Models

Depending on the type of deployment, ERP vendors use two pricing models: perpetual licensing and subscription plans. Here’s how they work:

Perpetual licensing – Companies that choose to host ERP software using their own servers (on-premise deployment) generally pay a perpetual licensing fee. This one-time cost is paid up-front and is based on the number of users and level of customization.

Perpetual licences usually don’t include recurring costs like maintenance, support and upgrades.

Subscription plans – Companies can also pay subscription fee to access cloud ERP software, which the vendor maintains and hosts on a third-party data server. The software-as-a-service (SaaS) pricing model means fees are paid per user monthly or annually.

Subscription plans often require companies to have a minimum contract length and come in various tiers with increasing functionality and modules.

Implementation Costs

ERP implementation is famous for being a long and expensive process. Costs include:

Modules or features not included in base price – Some solutions may charge additional fees for individual modules or advanced features, including payroll, manufacturing and e-commerce. There are also industry-specific solutions that offer features for a particular market.

Customization – Many companies require customization for their specific business processes, and costs can add up quickly. Businesses should make sure they focus on adding only the features they need.

Consultants – Many vendors, especially larger ones like Oracle, SAP and Microsoft, use third-party consultants for implementation. Costs can vary significantly for services like change management and data migration.

Hardware – Companies that want an on-premise deployment will need to purchase data servers and hardware infrastructure to host their ERP system.

Training – Some vendors may include basic training services for free during implementation, but others may offer them at an additional cost, especially if the training is done at the client’s site.

Small to medium-sized businesses can expect to pay between $75,000 and $750,000 for implementation. Costs for large businesses range from $1 million to $10 million.

Companies that can’t afford large up-front implementation costs should choose a cloud deployment, which doesn’t require hardware installation and may not offer customization.

Ongoing Costs to Consider

ERP systems often require additional resources that aren’t generally included in the base price, such as:

IT staff – ERP systems can be complex to manage. Companies that choose an on-premise deployment will need internal IT staff to handle any technical difficulties that arise.

Customer support – Basic support (e.g., knowledge base, email support) is typically included in the price of an ERP solution. However, vendors may offer plans that include advanced support, such as priority support or access to a dedicated customer service manager.

Maintenance and upgrading – Most on-premise ERP deployments charge an additional fee for annual maintenance and software upgrades. However, maintenance and upgrades are typically included with subscription pricing for cloud deployments.

Open-Source ERP Software

Most ERP solutions are proprietary or closed source, and customers can’t access the source code.

On the other hand, an open-source ERP system has publicly available source code. Companies can access the open-source code for free and customize the software themselves, rather than relying on the vendor.

Consequently, open-source ERP software can be less costly than proprietary ERP solutions, as companies don’t have to pay a licensing fee to access the source code. The drawback, however, is that companies need to have knowledgeable IT staff to implement and maintain the software, especially because there’s often a lack of support and documentation.

ERP System Vendor Pricing

We’ve researched pricing for several popular ERP systems. Note that many vendors in the market don’t offer pricing details publicly, so you’ll need to contact them directly for a quote.

BizAutomation Cloud ERP costs $79.95 per user, per month and requires three users minimum. The subscription price includes all ERP modules, except for e-commerce, which costs an additional $99.95 per month.

Dolibarr ERP & CRM is an open source software that helps organizations manage their business functions, so developers can simply download the source code for free. However, some of the modules and plugins that are available in the DoliStore marketplace may require a nominal fee.

Dolibarr also offers cloud-based deployment in two subscription tiers: Basic and Premium. Please note that Dollibar’s pricing is typically presented in euros. The Basic package starts at €9 per user, per month ($9.74 per user, per month) and has 5 GB of storage and the basic features of Dolibarr ERP & CRM. The Premium package costs €30 per month plus €12 per user, per month ($32.46 per month plus $12.98 per user, per month) and has all of the features of the Basic package, plus 25 GB of storage and priority email support.

ECOUNT ERP’s pricing is straightforward: $55 per month or $600 per year. This subscription includes all functions, unlimited user IDs and groupware access for 10 users. The solution also includes iOS and Android apps, a barcode app, multilingual support and an e-commerce module.

ERPNext is an open-source ERP solution that’s free for on-premise and self-hosted deployments, up to five users. Cloud deployments are offered through two pricing plans.

The Standard plan costs $20 per user, per month and includes 10 GB storage, 5,000 emails per month, tracking of three companies, 30 custom fields, 10 custom forms and integration to payment processors.

The Pro plan costs $50 per user, per month and includes 25 GB storage, 15,000 emails per month, tracking data for unlimited companies, and unlimited custom fields, forms and scripts.

LillyWorks offers a monthly subscription that starts at $100 per user, per month and scales up from that point. The manufacturing-focused ERP solution offers advanced functionality for shop-floor planning and execution, material planning, inventory management, and bill of materials and routing definition.

Microsoft Dynamics 365 allows companies to purchase individual modules based on their specific business area. For example, the sales professional module costs $65 per user, per month, while the sales enterprise module costs $95 per user, per month.

Odoo is an open-source ERP solution with two pricing options.

Odoo Community is free to implement and maintain on-premise. It includes basic modules for accounting, project management, customer relationship management (CRM), human resources, inventory, manufacturing, e-commerce and marketing.

Odoo Enterprise costs $28 per user, per month and includes advanced functionality and mobile device access. Additional apps can cost anywhere from $12 to $96 per month.

SAP Business One ERP doesn’t disclose pricing on its website. However, third-party implementation consultants say perpetual licenses cost $3,213 for professional users and $1,666 for limited users. Bug fixes, upgrades and patch releases are covered through a separate annual maintenance fee.

Subscription licenses cost $94 per professional user, per month or $54 per limited user, per month. The subscription price includes annual maintenance and requires a one-year commitment.

A Starter Package designed for start-ups and small businesses costs $39 per user, per month with a one-time fee of $1,357. It includes accounting, sales orders, item management and purchasing, but not service or manufacturing.

Synergy Resources Visual ERP invoices clients on a case-by-case basis, so exact prices are unavailable. However, companies that want to have up to five users can expect to pay between $10,000 and $15,000.

Xtuple ERP is an open-source ERP solution with four different pricing options and a 90-day free trial.

The Postbooks edition and other industry-specific versions include advanced functionality, specialized modules, and in-classroom and online training.

Prices range from $45 to $150 per user, per month or $1,350 to $4,500 for a one-time perpetual license. Cloud deployment costs $100 per month, plus $30 per user, per month.

Bottom Line

Many of the vendors listed here follow the per user, per month pricing model with tiers that provide additional features. Some also offer perpetual licenses for a one-time fee.

Be sure to consider what modules or features are required, as well as future scaling and business needs. You’ll also want to research implementation costs and how long the process will take.

If you’d like more information on ERP software or want to compare different solutions, we’ve reviewed over 45 ERP system vendors.

Speak Your Mind

*