Changing your financial and business management software represents a significant investment of time and money. Invariably, one of the first questions will be, “How much will this cost?”
The answer is: It depends on what you need.
ERP applications are complex and there are many factors that need to be considered before a final price can be given. However, since there are many elements in common among most ERP products, we can provide some general guidance on typical, user-based ERP pricing. For specific information on Acumatica’s modern, consumption-based pricing model, see Acumatica ERP Pricing.
To start, you should be familiar with the terms included in the section, “Clearing the confusion from buzzwords around the cloud,” from What is Cloud ERP Software?
How is ERP pricing determined?
In general, you either buy the software license outright or pay a monthly subscription for the license. There are advantages and disadvantages to both, including:
- Tax advantages of capital vs. operating expenses
- Paying one large upfront cost vs. on-going monthly costs
- Total cost of ownership over the lifetime of the product
When purchasing the software outright, you will also be expected to pay an annual maintenance fee for upgrades. Upgrades are usually included as part of subscription pricing.
In addition to the base software cost, almost all ERP vendors will charge a fee for every user of the system (Acumatica does not). Users are typically categorized as “heavy” users (those users that need access to the system all day as part of their work, like the accounting staff) and “light” users (those users that only use the system occasionally for price lookups or to enter time and expenses). Licenses are either given to specific user names that can only access one system at a time (named users) or by the total number of users that can access the system at the same time (concurrent users).
Costs also vary depending on your industry. For instance, a large manufacturing or distribution company will need to augment base Accounting and Financial functions with capabilities such as inventory management, bills of material, and shipping and receiving, functions that most strictly service companies don’t need. These additional functions add to the overall cost of the base product.
Since every company is unique, there will typically be some additional customizations required to get the software to operate with your business processes. Whether you provide the software developers or your implementer does, there will be an additional cost for these customizations.
Most ERP solutions support a number of third-party software products (or extensions) that can help businesses meet specific needs that the base system does not, such as integration with credit card vendors, EDI compliance, sales tax automation, and marketing automation, to name a few.
So, How Much?
In addition to the cost of the software itself, the final cost to actually implement the ERP software is also affected by factors including:
- The complexity of your particular implementation
- The complexity of migrating data from your old system into the new system
- The number of external interfaces you need to support
- Transaction volume
- The complexity of customizations
- Training users on the new system
These costs can vary widely, but, for most ERP products, expect to pay about 1.5 to 2.5 times the base cost of the software for implementation services.
To find out for yourself the real cost of an ERP system, and to get an estimate of the Return on Investment (ROI) and Total Cost of Ownership (TCO) of a new system, use Acumatica’s ERP cost calculator. See the blog ERP ROI Calculator: How to Get a True Return on Investment (ROI) Calculation for more.
What about the cloud?
Deploying ERP software in the cloud offers companies distinct advantages, most notably: Convenience and cost savings, because there is no upfront cost to purchase the hardware or staff to maintain it. The hosting providers usually handle:
- Hardware configuration and maintenance
- Software installation and maintenance
- Data backups
- Multiple levels of security
- And more
Most cloud implementations are only available with subscription pricing.
For more benefits of cloud ERP, see the article, Why Is the Cloud the Future for ERP Implementations?.
How is Acumatica different?
Unlike traditional ERP vendors, the Acumatica price is NOT based on the number of users.
We believe that companies that charge per user actually do a disservice to their clients because there is a temptation to limit access to the ERP system to certain staff in an effort to save money.
For more information on Acumatica’s modern, consumption-based pricing model, see Acumatica ERP Pricing.
How do I buy Acumatica?
Acumatica is only available through our reseller partners. Our partners specialize in Acumatica deployments over a wide range of industries, including manufacturing and distribution, retail and ecommerce, and professional and field services.