ERP Solution Pricing
ERP solution pricing field, most often, depends on the customer. Because it is the client who refuses the typical solutions offered by an ERP vendor and makes adjustments. This leads to the involvement of a larger number of specialists and increases in the cost of projects.
How much should I spend on ERP?
This purely depends on your expected output from the application, the number of users and so on…. for an average production unit this value can be somewhere between 30k to 100k USD.
What does ERP solution pricing depend on and how to reduce the cost of ERP outsourcing?
Imagine that you need to install a system for controlling the distribution of goods in stock. And also put video surveillance with remote access. You contact an ERP vendor for a software solution to these issues.
If the company already had experience in installing such a system or they know about the existence of the necessary software and hardware, then they will offer to install a similar system at the new facility. This will be a typical solution.
A typical solution is a combination of software and hardware that are successfully used to solve similar problems.
The price tag rises when the typical solution offered by an ERP company is not suitable for the final customer. The reasons are different.
Refusal of a typical solution can be caused by many factors:
· Non-standard object;
· The customer has no desire to be "like everyone else";
· Aware of the vulnerability of such systems;
· I want to get better functionality (add my own functions), more convenient software interface, etc.
Any software improvements or the search for a unique solution is an increase in the ERP implementation cost.
An atypical solution is an individual approach that allows you to create a special system. There is no standard solution. Such a system is created under non-standard conditions and tasks.
For example, you need to distribute the IT budget for the next year and modernize the system to monitor calls for the call center. In the first case, you do not need to attract a lot of specialists. An IT professional who has already been involved in budgeting will easily do the work. Even though the conditions will be different.
In the second case, you need to upgrade the existing call control system. Developers, IT specialists, programmers and so on can be connected to this work. That is why non-standard solutions are more expensive. However, non-standard solutions, in most cases - this is the only way to reduce the time costs of company employees and develop software that takes into account all needs.
How to increase company revenue and reduce the cost of ERP system outsourcing by applying non-standard solutions
It is clear that the use of technologies that are already being applied is a reduction in costs at the implementation stage. But, in some cases, non-standard solutions reduce the company's monthly expenses. Moreover, original ideas allow you to automate more processes and increase revenue.
Many managers are afraid of atypical solutions and stop at already known methods. Fear arises from doubts:
All these doubts disappear even before the conclusion of the contract. When developing non-standard solutions, a brief is used, consultations are held - this is necessary to draw up an exact technical task. Everything is predictable and understandable.
If we take our example on the modernization of the call control system, we can add our own features to the standard call-center program.
How it works: adding the button “write the number to the database of warm clients” in the standard program. When pressed, the operator sends the number to the database in one click - this will increase its speed. Because before the number had to be copied manually. The effectiveness of the operator consists of the ability to convince (sell) and the number of outgoing calls. Using a non-standard solution, we have increased the speed of the operator, and therefore, increased the company's revenues.
How to reduce the price of ERP software outsourcing with a non-standard solution?
Non-standard solutions can reduce the IT budget, leaving functionality. Generates a lot of additional costs:
· What if I get the wrong result?
· And if investments do not meet expectations?
· Now we will spend the budget and the output will be that there is already a similar system among competitors.
· Purchase of spare parts;
· Minor repairs, etc.
With an emphasis on mobile communications, there are also nuances. Total dependence on the operator's company, the workload of stations and the need for a specialist in communication systems.
Large companies can afford to work with several communication systems at once and maintain staff for their maintenance. But small firms with many branches of this can not afford. Some companies generally do not consider cloud technologies as a good option for organizing a communication system. However, the use of the cloud system is a good opportunity to reduce communication costs and the ERP system cost. This is possible due to the fact that the annual cost of renting a cloud, as a rule, is less than the cost of ERP implementation.
Technical development and modernization is a peculiar evolution of technology. The use of technological superiority allows you to get advantages. Strategy: do me the same way as my competitor - this is a way to catch up, not to become a leader.
Why there is an increase in ERP solution pricing?
The price tag increases. And there are three reasons for this.
1. The first reason for the increase in ERP solution pricing, we have already mentioned at the beginning of this article - these are typical and atypical solutions. The first will always be cheaper. But the latter is more effective. Because they adjust the system to the needs of the company.
2. The increase in the final price due to improvements that were not included in the project. Small changes in desire sometimes lead to serious changes in software and hardware. Each such "movement" increases the cost of the project. This is due to the banal increase in labor costs and additional work.
3. Change in the exchange rate. Most companies are dependent on the dollar. During the period of instability, there are special risks. If equipment suppliers start to tighten the screws, then ERP companies are forced to raise prices even for projects that have been run to currency instability.
ERP solution pricing is always covered with a fog of numerous conditions. Therefore, it is difficult to determine the value of the proposal. However, the use of modern technologies and large investments at the start often allow saving in the future.
Fear of new technologies, as we have said, is a normal phenomenon. But it is better to dispel. Because the use of non-standard solutions will give your company a competitive advantage.
Most often, our customers are afraid to get the wrong functionality. Simple tools: brief, technical task, methods of calculating the result and the contract, where it is written what happens at the output - all this will protect your interests. Therefore, do not be afraid of non-standard solutions. The result will be predetermined and economically justified at the design stage.
Non-standard solutions contribute to the development of the company. They will be an additional detuning from competitors.