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How Much Does an ERP System Cost?

I’m going to guess—you’ve landed on this blog because you believe an ERP system is the key to taking your business to the next level. You know its automation, flexibility, and reporting capabilities can streamline workflows and cut costs. But now, the big question in your mind is: How much does an ERP system cost?

How Are ERP Systems Priced?

There are two main areas of focus when it comes to ERP pricing. The first is the value of the implementation, and the second is the value of the ERP license. The implementation is the initial effort required to deploy the system, while the license value refers to the cost associated with obtaining the rights to use the ERP software.

However, that’s where it ends as far as simplicity—ERP pricing is not as straightforward as one might imagine. Different levels of customization, pricing models, and the number of seats are all factors that affect the pricing model of your ERP system.

While this pricing structure complicates the question, ‘How much does an ERP system cost?,’ it’s ultimately an advantage for the end-user, as it ensures corporations pay according to their needs—making ERPs more accessible while offering flexibility to adjust to the needs of each client.

Factors That Influence ERP Pricing

These are the most important factors that can influence the value of your ERP.

1. Customization

Business processes can vary, even within the same industry, requiring a tailored ERP approach. These modifications require a team of developers to work on the changes, naturally, leading to a higher investment during implementation.

2. Number of Seats

As is the case with most SaaS licenses, you might need to request additional ‘seats’ for each end-user. This can make the investment of an ERP vary from one organization to the next.

3. Cloud Vs. On-Premises

Hosting an ERP on-premises can require a significantly higher investment than procuring a cloud-based model. This is because building and maintaining on-premises services can be a costly endeavor.

Instead, you can opt to choose a cloud-based ERP like Xledger. This delivery model lowers upfront costs because there’s no need to purchase hardware. It is also easy, quick, and convenient to scale.

4. Maintenance & Support

Besides the usual features, some vendors include “support packages” for ongoing maintenance, upgrades, patches, and security updates.

ERP Pricing Models

How much an ERP costs also depends on the licensing model that the user subscribes to. These are the most common ones:

1. Per User Pricing

A vendor may ask for a fixed value for each assigned user or base it on the maximum number of concurrent users who can access the platform.

2. Subscription-Based Pricing

Cloud-deployed systems, including Xledger, typically use this flexible and predictable model. The model is based on a fixed monthly subscription which typically covers licensing, maintenance, and updates.

3. Perpetual Licensing

For on-premise ERP systems, businesses often invest in a one-time sum for the software. If the agreement includes implementation and maintenance, this may require additional investment.

How Much Should You Pay for Your ERP?

So what is the final verdict on how much your ERP system should cost? According to a study, businesses can expect to spend on average about $9,000 per year on each user. Of course, this number varies greatly depending on business size and the number of users. A general rule of thumb for ERP implementation. is that businesses should plan to allocate up to 3% of their annual revenue for the deployment.

Xledger: The Best ERP ROI

Xledger is a global leader in delivering a value-packed subscription at a convenient cost. Our cloud-based ERP system offers the scalability, flexibility, and efficiency that on-premise ERPs don’t.

Our convenient subscription-based model also ensures scalability and predictability that businesses can trust.

Find out more about the benefits of licensing a cloud-based ERP, and schedule a demo today.

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