Most of the manufacturing and distribution organizationsare planning to settup a budget for ERP software solution, especially those organizations entering into a new financial year.
As modern ERP solutionis integrated and with integrated top features makes data instantly available throughout the manufacturing process.
Setting a budget for ERPuis an crucial process from keeping the ERP project on time and helps in choosing the rightERP software solution.
Top Factors when Setting a Budget for ERP :
1: On premise or Cloud Model
Setting a budget for ERP must consider how the ERP system should be deployed – whether like on-premise or Cloud ERP model . The benefits differ in both model. As a yearly subscription fee for a cloud-based system will basically add up to about 20 to 30 percent of the cost of a similar system’s perpetual license.
With on-premise deployment, users must pay AMC costs that run between 10 and 20 percent of the original licensing cost this may include upgradition.
2: Software License
Depending on deployment model, software licensing can be categorised into two categories: perpetual on-premise license, and subscription-based SaaS license like cloud based. SaaS software requires less amount, with costs spread across the agreement.
Software licensing isn’t the only price point to consider during deployment. Understand all the costs including hardware,middleware software many more. – prior to making any decisions for buying an ERP software system.
3: Total Users
The size of the company, responsibilities and number of employess who manage work structure and otherstructural considerations all come into map when assessing how many number of users will needed to run theERP system.
SMEs will obviously require fewer user licenses only, but should keep into mind partners, suppliers distributors and extended enterprise userswho might need access to the ERP system.
For an on-premise ERP model will impact the process of setting an ERP software budget as it needs hardware of the new solution and which increases the budget.
Most of the ERP systems requires additional internalfeatures or external third parties to integrate with other company systems, solutions and other functional areas. While Setting an ERP budget you must consider the resources to integrate and communicate with the ERP software system, this may require additional software or development time with that company to do so.
6: Customizations :
Customizations and development features might be needed around areas like places work is dependent on automation and workflows.
Webinars and training programsfor users make betteroutcome from the ERP system.While Setting up an ERP budget company must consider building an extensive training courses, educational materials, and user resources to develop an effective training strategy for the employees.ERP system training should be a continuous process to get an better ROI.
8: Support and Maintenance
A budget must basically include support and maintenance costs when calculating the total cost of the ERP software system. It helps to put a cap on maintenance and support costs in the coming future.
While considering an ERP Software system, surely consider is the technology support competitiveness and future growth of the company.