As the ERP market continues to grow, more and more companies are spending money on software development. These companies want their applications to provide them with an edge to help them compete with the big guys. They need to know the exact estimation of ERP software cost to develop an efficient one for their businesses.
Accurately estimating the cost of developing an ERP system is vital for determining the right solution for your firm. After all, if you overestimate the price tag, there is no way to make up for it once you start building.
But if you underestimate the costs that go into developing solid ERP software, then you’ll be in trouble two months down the line when you start seeing late payments from clients and finding ways to fulfill their contracts owing to delays in your process workflow.
So, how much the cost of an ERP system for small businesses will be and what does it take to develop one? In today’s article, we’re going to briefly dig down into this, and show you the key variables that determine the cost of development.
How to Start Estimating the Cost of an ERP System for Small Businesses?
Depending on your business, you may be able to get away with a smaller budget and still get an ERP system that works for you. But if you’re looking to develop a system that will help streamline your operations, then it’s going to cost more.
If you’re looking to get started, you’ll need to budget for the cost of:
- Software development.
- Testing and validation.
- Maintenance fees and updates.
Models of ERP Software Development
Developing ERP software can be quite a costly process. With the right team, you’ll be able to get your project done faster and at a lower cost than if you were to go it alone. While there are many different ways to develop an ERP system, here are some of the most common models used.
1. A Packaged Solution
This is where software developers offer pre-made packages for businesses looking for an affordable way to implement their software. The packages usually include the core functionality needed for your company’s business processes, as well as additional features that will help make your business run more smoothly.
2. A Custom Solution
This is when developers create a custom package based on your specific needs and requirements. They may even use existing software libraries or frameworks that they know will work well with your business processes and goals.
3. A Hybrid Approach
In this scenario, you would combine both packaged and custom solutions into one package which includes all of these components but also includes specific elements that were not included in any other model above (for example user interface elements like icons).
Factors That Affect ERP Software Cost Estimation
Software development projects tend to take longer than expected because of unexpected challenges or changes in requirements. The cost of a project can also be affected by how much effort is put into quality assurance testing and bug fixes after release—or even during development if problems arise.
Many factors affect the cost of an ERP system for small businesses. Here are a few, notable ones.
1. The Size of Your Company
The larger your company is, the more expensive your software will be because you need more functionality to handle all of the data.
2. Open Source vs Proprietary Solutions
Open-source solutions tend to be cheaper than proprietary ones since they’re less expensive to develop and maintain. However, if you need some specialized functionality (like an integrated CRM system) then you’ll likely have to pay extra for that.
3. The Number of Users in Your Company
If there are a lot of people in your company whose jobs require access to an ERP system then it’s going to cost more money each month than if only a few people use it. This is because each person will have to pay for their copy of the software and support costs associated with running it properly.
4. The Complexity of Your Business/Company
The complexity level of your business also affects your ERP Software Cost because as your business grows and becomes more complex, so does its need for additional functionality within an ERP system.
5. The Industry Type of Your Company
The type of industry your company operates in also affects your ERP Software Cost. For example, if you are a small pharmaceutical company then it will be more expensive than a large manufacturing company because you will require more functionality to serve your customers better.
Also Read: Why Mobile App Development is Good for Career?
The Right Way to Determine an ERP Software Cost Estimation
When you’re looking at the cost of developing ERP software, you have a few options:
- You can develop your own ERP software! This is a great route if you’re a developer or know one. There are plenty of examples of open-source ERP software that can be used as models for your system.
- You can use an off-the-shelf solution like SAP or Oracle Enterprise Resource Planning (ERP). These are generally more expensive than custom software, but they’ll give you access to all of the bells and whistles that come with a ready-made product.
ERP software costs are the same as developing any other software, but the market is more competitive than ever before.
The main components of an ERP system are the core application, which includes all of your company’s financial and accounting data, and a series of add-ons that enhance your core application. These can include modules for customer relationship management (CRM), supply chain management (SCM), and more.
Also Read: How To Boost Your Business With App Development ?
The average cost per project ranges from $25,000 to $50,000. In some cases, developing an ERP system may cost as much as $100,000. In other cases, it could cost tens or even hundreds of millions of dollars. However, there’s no single answer because every company is different!
It can be a bit difficult to figure out how much an ERP software cost will be, Because of the nature of ERP software, it can take anywhere from two months to several years to develop and for this Invozone will help you.
The estimated cost of an ERP system for small businesses varies depending on what kind of products they are selling or the niche/industry they operate in, how much customization they need to make it fit their business models, and whether or not they use third-party developers for any of the add-ons.