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erp
licensing
overview
As a business, investing in an ERP system is one of the most crucial things to consider. An ERP software doesn’t come at a cheap price as it handles a wide variety of business processes and its price is hugely dependent on multiple factors like the type of business model, deployment, number of users, number of modules, customizations, integrations, level of effort and more.
There are many ERP cloud vendors to choose from as they offer specialized functions, pricing model etc. that can create vast differences between the prices. An age-old solution like QuickBooks is probably going to cost less than a NetSuite solution, as QuickBooks is just a solution “to get the job done”. But don’t be surprised if you have to eliminate your entire QuickBooks contract term, solution and investment after a few years as QuickBooks is not scalable nor customizable when compared to NetSuite and hence the price difference.
To sum it up, in the ERP world, you always get what you pay for. So, at ERP Buddies we always like to encourage our customers to choose a solution that stays relevant even 10+ years from now considering your immense future business growth. We also offer a 14-day free NetSuite trial based on your business requirement so you can make an informed decision every step of the way.
To explain furthermore we have created a complete list of what an ERP is, how the price operates and how you can save on your ERP licensing cost.
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what is an erp system?
ERP stands for Enterprise Resource Planning.
And that’s exactly what a growing business needs, an ERP system to help manage all operations and resources.
In layman’s terms, an ERP system helps companies to streamline their business processes and operations with a centralized system that interconnects all business departments to provide a complete picture. Some common reasons to opt for an ERP system are collecting and analyzing business operations, better supply chain and inventory management, improved customer relations, efficient accounting and financial management etc.
ERP systems are often comprised of multiple modules. When it comes to an ERP system like NetSuite, users have many ways to save on their NetSuite licensing and implementation costs. Companies can choose specific modules to get started and to control costs in the earlier stages, whereas in time companies can always add additional modules to improve the functionality of their ERP system.
common erp modules
Finances & Accounting
Supply Chain Management
Inventory Management
Customer Relationship Management
Business intelligence and reporting
Manufacturing
Distribution
Human Resources
Finances & Accounting
Finances
& Accounting
The Finances and Accounting module of an ERP system deals with work functions that involve company financial management, budgets, expenditures and more. This module also handles all the accounting operations including financial management of accounts payables (AP), accounts receivables (AR), general ledger (GL) etc.
Supply Chain Management
Supply Chain Management
The Supply Chain module deals with tracking products from the manufacturing facility to their distribution to customers. The Supply chain module comes with features like supplier/distributor scheduling, purchasing, shipping, tracking shipments, product returns, support for 3rd party shippers and more.
Inventory Management
Inventory Management
An ERP system offers many tools to accurately track and manage inventory. An ERP like NetSuite can also track inventory across multi-locations, purchase orders, set up inventory reorder points etc. Some of the main features of an inventory management module are:
- Replenishment management
- Cycle Counting
- Product Traceability
- Warehouse Management
- Barcode scanning
- Demand planning and Supply chain planning
- Distribution Requirements Planning etc.
Customer Relationship Management
Customer Relationship Management
The core functionality of a CRM module primarily deals with the customer relationship aspect of a business. Companies can use the CRM module to automate their customer relationship management activities like creating work orders, sending weekly emails to customers, sending invoices automatically upon order fulfillment etc. Team members can also track customer orders and can provide specialized discounts if needed. Marketing tasks like managing campaigns, advertising and lead generation can also be easily managed with a CRM module.
Business intelligence and reporting
Business intelligence and reporting
The business reporting and intelligence module collect data from the entire organization to showcase them in proper reports. These reports help the company in making informed decisions. This module also comes with an interactive dashboard that can be fully customizable with features like showing real-time data into order delivery etc.
Manufacturing
Manufacturing
Manufacturers can fully use functions that are specific to the manufacturing industry in this section. Management of bill of materials, work orders, quality control, product engineering, manufacturing requirements planning (MRP), product lifecycle management etc. are just some of the functions of a Manufacturing module.
Distribution
Distribution
With the distribution module, companies can integrate their supply chain partners and distribution channels with a single ERP system. Core functionality includes Inventory fulfillment, Shipping partner integration, product return management, Self-service centers for Vendors and more.
Human Resources
Human Resources
The human resource module gives companies total control over their human resources activities. A Human Resources module gives your management team the power to effectively manage crucial information like new employee onboarding, training, performance management, payroll, promotions, expense management etc. in a single ERP system.
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ERP system licensing software costs
Every ERP software provider will be different, and their solution implementation will often include different customizations, payment plans, integration capabilities and more that will affect the pricing of an ERP system.
Primarily there are two types of ERP software costs
Subscription plans pricing and licensing
Companies can choose an ERP system like NetSuite which operates on a subscription fee basis. In this scenario, the company will pay a subscription fee to access the cloud software which will be maintained and hosted by the cloud provider. In the subscription plan, fees are paid per month or annually in some cases based on monthly users.
A subscription plan may also involve a contract that spans for a minimum duration that includes various system tiers, functionalities, and choice of modules etc.
Private Cloud Subscription (Perpetual licensing)
Some companies choose to opt for an ERP solution that involves paying a one-time upfront cost for the software based on the number of users, customizations, infrastructure costs etc. This pricing model might feel enticing as it includes a single one-time cost of implementation fee, but it is important to consider that the one-time costs do not cover the ongoing maintenance and upgrade costs. This solution may also involve higher hardware infrastructure costs.
ERP cost of
implementation
ERP implementations are well known for having a high cost of ownership and for being time-consuming, but that only happens when you don’t have a concrete project plan in place. Some ERP vendors may also have some hidden costs involved in their contracts, so watch out for those!
Below, we have included some of the factors that generally affect the total cost of an ERP implementation.
For our customers, we like to encourage them to choose a long-term NetSuite contract as it locks the licensing costs for up to 5 years which results in vast money savings.
Add-on modules or features that are not included out-of-box
Every solution is unique when it comes to an ERP implementation. Companies can choose to opt for Industry-specific solutions that generally contains all the important aspect of that specific business. But adding additional work functions generally means implementing modules that are not part of the original package. Some examples can be adding a payroll and eCommerce management module to your Manufacturing ERP.
These additions will cost more depending on the level of customization, number of modules, integrations etc.
ERP customization
Some companies may often have complex work processes that won’t be readily fulfilled by an ERP system. For such a scenario, ERP customizations come in hand. However, it is important to note that ERP customizations must be done by professionals who know the system completely as broken customizations can quickly add up to the costs.
ERP training
ERP training is another cost to consider if your ERP environment is a bit complex. Basic training can be provided for free during the implementation, but if the training has to be done at the client’s site, additional costs may be charged.
Number and Type of user
Make sure to have the right number of total users that will be using the ERP system. As a rule of thumb, the more users you have with complex permissions, the larger the cost of the ERP implementation.
What are some ongoing ERP
maintenance costs to consider?
An ERP system is a lot of moving parts that need some ongoing maintenance. Here are some additional prices to consider.
IT Staff
ERP systems are complex and often require a professional’s touch. If your company chooses to implement an on-premise ERP, you would also need a full-fledged IT department to take care of its maintenance, upgrades on a constant basis etc.
Customer support
A basic support package may be included in the ERP implementation. However, for advanced support services, ERP vendors may charge additional fees for guaranteed priority support.
ERP maintenance and upgrades
Almost every on-premise ERP system charges an additional cost for its maintenance and software upgrades. When it comes to a cloud ERP implementation, the maintenance and system upgrade costs may be involved in the subscription price itself.
Why choose ERP Buddies for your erp licensing?
Come say "Hi"
ERP Buddies is a North American Official Oracle NetSuite Solution Providers with diverse experience in implementing NetSuite ARM solution for a broad array of verticals
With offices in the U.S, Canada, Europe and Asia, our experts are accessible globally and make it their priority to create a smooth and positive experience for clients. Our experts assist clients throughout the entire implementation process, with on-site support and consultation, along with additional assistance in customizing your system to guarantee it meets your business needs.
Come say "Hi"
ERP Buddies is a North American Official Oracle NetSuite Solution Providers with diverse experience in implementing NetSuite ARM solution for a broad array of verticals
With offices in the U.S, Canada, Europe and Asia, our experts are accessible globally and make it their priority to create a smooth and positive experience for clients. Our experts assist clients throughout the entire implementation process, with on-site support and consultation, along with additional assistance in customizing your system to guarantee it meets your business needs.
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