What drives the cost of expensive ERP Systems/Why erp is expensive?
The first thought that came to mind after learning about ERP is that it is pricey and what are those factors that make it pricey.
ERP solutions are designed to be one-size-fits-all platforms for managing all aspects of a major, frequently globalized economy.
ERP is expensive because it is completely customized for your business which requires a significant amount of effort from your company. ERP is expensive because of lots of factors such as License cost, Implementation cost, Consultancy cost, Customization cost, Configuration cost, Maintenance cost/Support, Infrastructure cost and among others.
The process of planning, setting, and installing an ERP is known as ERP implementation. This positive benefit in the automation of several operations that need both time and money to complete. Companies may also provide different users varying levels of access from different locations using ERP. The more users a company needs, the more they must pay.
Customization allows a program to develop new code in order to fulfill specific requirements. This feature required a unique implementation based on the requirements. Whereas configuration prefers to utilize tools inside the program rather than customizing the code which would affect the system features or behavior. Now, when it comes to creating new code or adding new tools in a software which is not familiar with the specific code or tools then it takes time and cost both.
ERP software is not for buying or selling, instead it is a license for use. This license allows you to use software for a specific amount of time, particular company or number of users. The license should be renewed for continued access when it has passed the specified time period which has specific cost.
After handover or releasing ERP software, it requires some modification or changes to detect the errors and re-correct them to improve the performance which is considered as maintenance cost. Proper maintenance reduces the risk of breakdowns, ensures safety, increases efficiency with customer satisfaction.
A consultant is a concerned person who is recruited to assist the organization to connect with the ERP software. Though it comes at a cost, it offers several benefits, including improved data and security, improved business process, and cost savings through improved customer service.
The design of software that conducts and combines the operations and fundamental business process is referred to as ERP infrastructure. This feature makes the businesses more structured and efficient. An infrastructure looked at a business from a structural standpoint.
Every feature that makes ERP costly has its own set of criteria and viewpoints for making the software more comfortable and user-friendly. After learning about ERP, it may seem costly, but after going over the different features and their benefits, it's clearly visible why ERP is so expensive. ERP helps you save time and money by automating operations and simplifying your business.