Investing in an enterprise resource planning (ERP) solution, while it is proven to help businesses streamline processes and become more efficient and profitable, is a very lofty and complicated undertaking. Unlike basic accounting software, there is not a specific price for ERP solutions. CAL Business Solutions, a Connecticut-based Microsoft Dynamics GP partner, wrote a detailed and helpful whitepaper explaining the elements of formulating a price for an ERP implementation. This whitepaper is available at the CAL website.
Over two blog posts this week, the GraVoc News Blog will examine the elements that go into the price of an ERP project and why, as the CAL whitepaper explained, choosing an appropriate vendor may be even more important than choosing the right software.
You cannot find a specific price for any kind of ERP software, and that is just the nature of the business. Launching an ERP solution is more similar, in terms of pricing, to building an addition to your house than it is to buying QuickBooks or Microsoft Office. The following elements, as described in the 28-page document, can all drive up—or drive down—the price of an ERP project:
- Software Licenses: As the CAL whitepaper described, the price of software licenses is variable depending on the number of licenses, the amount of modules being used, and the scope of maintenance plans, that typically include upgrades, support, and access to a searchable knowledge base. A good way to minimize costs is to ensure that you are not paying for things that aren’t necessary, such as too many licenses or access to modules that will not be used.
- Consulting Services: The whitepaper asserted that for every dollar you spend on software licenses, you will spend another $1.00-1.50 on consulting services. These services include implementation, setup, and data conversion, if necessary. Consulting services also could include custom development, tailoring the ERP solution so that it integrates with other programs, or project management tasks so that the efforts being put forward have a clear goal and direction. Here especially, it is necessary to ensure that the prospective partner/reseller has the requisite expertise to help guide your business through this project.
- Training: A massive ERP project’s value is greatly diminished if the users do not know how to use the software. A central theme throughout the CAL whitepaper is finding a partner who can handle the appropriate procurement, perform the necessary services to make the system work, and train users how to use it. Needing to work with different third-party service providers is more difficult logistically, and the right vendor would be able to handle this.
- Hardware: ERP systems, including Microsoft Dynamics ERP systems, typically run best on a server dedicated specifically to running the solution’s processes. This often involves selection of the correct server and installing licenses to server operating systems for each license of the ERP purchased.
- Support: Inevitably, challenges may arise with the use of a new system. Therefore, a business should consider some quantity of support services as part of its ERP project. The CAL whitepaper outlines eight questions that should be taken into consideration in regards to support and whether a vendor being considered provides the necessary care and support.
Later this week, the GraVoc News Blog will analyze these elements, choosing the right vendor, and why we hope your business seriously considers GraVoc as a candidate for implementing your ERP project. GraVoc, based in Peabody, MA, is a Microsoft Gold Certified Partner specializing in implementing a wide variety of ERP products and business solutions, including Microsoft Dynamics AX, GP, and CRM. This year, they are celebrating fifteen years of business serving Greater Boston, New England, and beyond for consulting services in the areas of information systems, information security, and technological and professional services. For more information about GraVoc and its diversity of services, please visit www.gravoc.com and www.gravocsoftware.com.