How much ERP Systems Cost in India?: Best Guide to understand and take decision.

ERP Systems Cost in India

What is ERP System?

An Enterprise Resource Planning (ERP) system is a powerful software solution that integrates various business processes and functions into a unified platform. It allows organizations to streamline operations, manage data, and make informed decisions by providing a centralized view of information. From finance and human resources to inventory and customer relationship management, ERP systems offer comprehensive tools for efficient business management.

Few of core features of ERP Software / Cloud-based solutions are as below.

1. Inventory management with different costing methods like average cost, Standard costing etc.
2. Supply chain management
3. Financial management
4. Quality control and Quality management
5. Project management
6. Manufacturing process with production, Subcontracting etc.
7. Procurement management.

How are ERP Systems classified?

ERP systems are classified based on their scope and complexity. They can be categorized into three main types:

• Small Business ERP: Tailored for small enterprises, it focuses on essential functionalities and scalability.
• Midmarket ERP: Designed for medium-sized businesses, it offers broader functionalities and can handle more complex operations.
• Enterprise ERP: Suitable for large organizations, it encompasses a wide range of functionalities and is highly customizable.

ERP systems come in various types, each catering to different business sizes, industries, and complexities. Here are the main types of ERP systems along with examples:

On-Premises ERP

On-premises ERP systems are installed and maintained within an organization’s physical infrastructure. The software is hosted on the organization’s servers, offering full control over customization and data security. However, it requires significant upfront investment and ongoing maintenance.

Example: SAP ERP, Oracle E-Business Suite, ACTouch Cloud ERP

Cloud ERP

Cloud ERP systems are hosted on remote servers and accessed via the internet. They offer scalability, flexibility, and lower upfront costs compared to on-premises solutions. Cloud ERP is ideal for businesses looking for rapid deployment and reduced IT infrastructure.

Example: ACTouch, NetSuite, Microsoft Dynamics 365

Open-Source ERP

Open-source ERP systems are software whose source code is available to the public. Organizations can customize and modify the software to meet their specific needs. They offer cost savings and flexibility but may require technical expertise.

Example: Odoo, ERPNext

Industry-Specific ERP:

Industry-specific ERP systems are tailored to the unique requirements of certain industries. They come with pre-built features and functionalities relevant to that sector, minimizing customization efforts.

Example: Infor CloudSuite for Healthcare, Plex Manufacturing Cloud

Small Business ERP

Small business ERP solutions are designed for startups and small enterprises. They focus on essential functionalities and are often more affordable and user-friendly.

Example: ACTouch Cloud ERP, Zoho ERP, QuickBooks Online Advanced

Mid-Market ERP

Mid-market ERP systems cater to medium-sized businesses with more complex operations and a larger workforce. They offer a broader range of features compared to small business solutions.

Example: ACTouch Cloud ERP, Sage 300, Epicor ERP

Enterprise ERP

Enterprise ERP systems are designed for large organizations with complex operations, multiple locations, and a vast user base. They offer extensive customization and scalability.

Example: Microsoft Dynamics 365 for Finance and Operations, SAP S/4HANA, ACTouch Cloud ERP

Choosing the right type of ERP system depends on factors like business size, industry, complexity, budget, and growth plans. It’s essential to evaluate these factors and select the ERP system that aligns with your organization’s goals and requirements.

Migrate to 100% Cloud ERP Software Now Want to know more about ERP Features and our Services?

How much does an ERP System cost?

The cost of an ERP system varies based on factors such as the scope of implementation, the size of the organization, the chosen features, and the vendor. Costs can range from a few thousand dollars for smaller businesses to millions for larger enterprises.

Use ACTouch ERP License Cost Calculator to find Total Cost of ERP Implementation in India

How much do ERP Systems Cost in India?

ERP systems cost in India can vary significantly depending on similar factors. The cost charged are mainly of 3 elements

1. ERP license Prices for each user wise or perpetual licenses for unlimited users.
2. Implementation fees – It could be ONE time or each MONTHLY based.
3. Additional costs like Customisation, Report etc.
4. Recurring License model and Maintenance costs, if any.

ERP Prices and ERP Implementation costs together can fall between the below prices. Always avoid hidden costs while informing Customers.

1. For small businesses, a basic ERP system might start at around INR 4 to 8 lakhs
2. Mid-sized organizations might expect to invest between INR 10 to 30 lakhs.
3. Larger enterprises with complex requirements could potentially spend anywhere from INR 50 lakhs to several crores for a comprehensive ERP solution.

In India, many companies, don’t understand the ERP Systems value it brings to them. So the owners will practically run for the LESS PRICE ERP products.

What are the elements of ERP Systems costs?

ERP License Costs / ERP Prices.

The initial purchase of ERP software licenses can vary widely based on factors such as the scope of usage, number of users, and chosen features. Different vendors offer licensing models, including

1. User-based – How many users you need to access the ERP application and ERP prices are decided based on it.
2. Module-based- Features and functionality based prices.
3. Subscription-based – Here the ERP Prices are depending on number of Users or Number of Transactions per month.

Example: A mid-sized manufacturing company with 50 users might invest around $100,000 for software licenses, including core modules like finance, inventory, and production.

ERP Implementation Costs

ERP Implementation costs include expenses related to configuring and customizing the ERP system to match the organization’s workflows. This involves hiring consultants, developers, and project managers to tailor the software to specific business needs.

Example: Customizing an ERP system for a construction company might cost around $50,000 to $100,000, considering the complexities of project management and resource allocation.

Infrastructure Costs

ERP systems require hardware and networking resources to run effectively. These costs include servers, storage devices, networking equipment, and backup solutions.

Example: Setting up the necessary infrastructure for an on-premises ERP system might cost between $30,000 and $50,000, depending on the organization’s size and requirements.

Consulting and Professional Services

Engaging ERP consultants, project managers, and experts helps guide the implementation process, ensuring a smooth transition and optimal system setup.

Example: Employing consultants for a year-long ERP implementation project might cost around $75,000 to $100,000, covering expertise, guidance, and support.

Training Costs

Training employees to use the ERP system effectively is crucial for successful adoption. Costs include training materials, sessions, and possibly training software.

Example: Training a team of 30 employees over a few months might incur costs of $15,000 to $20,000, considering training materials and trainer fees.

Data Migration Costs

Transferring existing data from legacy systems to the new ERP requires time and resources to ensure data accuracy and integrity.

Example: Migrating customer data, product information, and financial records from legacy systems might cost around $20,000 to $30,000.

Ongoing Support and Maintenance

After implementation, ongoing support, updates, and maintenance costs contribute to the total cost of ownership.

Example: Annual support and maintenance fees can range from 15% to 20% of the initial license cost. For an ERP system initially costing $200,000, annual maintenance might be around $30,000 to $40,000.

Understanding these elements helps organizations prepare a comprehensive budget for their ERP system implementation. It’s crucial to evaluate not only the upfront costs but also the long-term expenses associated with maintaining and optimizing the ERP system. The investment in a well-implemented ERP system pays off through improved efficiency, accurate data, and better decision-making capabilities.

What are the recurring Costs of ERP systems?

Recurring costs of ERP systems are ongoing expenses required to maintain and use the system effectively. These can include:

• Subscription or Maintenance Fees: Annual fees for updates, technical support, and access to new features.
• Customization and Enhancements: Costs to modify or enhance the system as business needs evolve.
• Data Storage Costs: Expenses associated with storing data on cloud or servers.

How does an ERP Implementation happen? What steps to follow?

ERP implementation process involves several steps:

1. Planning and Analysis: Define objectives, assess requirements, and choose the right ERP system.
2. Design: Customize the system to match business processes and configure features.
3. Development: Develop any necessary customizations or integrations.
4. Testing: Rigorously test the system to ensure functionality and data accuracy.
5. Training: Train employees to use the new system effectively.
6. Data Migration: Migrate data from existing systems to the new ERP.
7. Go-Live and Support: Launch the ERP system and provide ongoing support and maintenance.

Investing in an ERP system is an investment in efficiency, collaboration, and informed decision-making. While the costs may vary, the benefits of improved productivity, streamlined processes, and enhanced business insights make ERP systems a valuable asset for businesses across India.