Great! So you’re now convinced why you should use accounting software. You also found an ERP solution that is affordable and features all the bells and whistles to run your growing business. Hold your horses! Think hard about the costs. Most likely the ERP’s published price is just one item to the total cost you’ll be paying.
We’ve discussed the 6 hidden ERP accounting software licensing cost in another article. Now let’s take a look at the costs to implement the ERP system in your office. You may be surprised how fast the total ERP expense can shoot up.
Where are you going to install the ERP if you’re getting an on-premise product? You will need a server and that server will need a secure, climate-controlled room. That means you will also need a heavy-duty server rack or cabinet to protect the server from man-made and natural disasters like flood, fire, theft, and earthquake.
You’ll also need a gateway desktop computer or workstation to act as the server access point. These computer should have a powerful computing power—at least more powerful than the rest of desktop PCs in your office because many computers will be hooked to this computer—and better specifications. The hardware alone can double or triple the total cost if you’re getting an on-premise ERP. It’s not to say cloud ERP has no additional costs, as we’ll point out in a while.
Whether it’s cloud or on-premise ERP, software installation may require additional OS or productivity tools with separate licensing. You’ll also need a technical expert to do the installation, usually a company representative. Some vendors provide free installation but others charge a consultation fee by the hour. Of course, you can do this by yourself if you have a strong I.T. networking skill.
Installing the ERP is just one side of the coin. You need to configure the settings, such as, its interfaces, user profiles, and charts of accounts. You may be charged with a separate fee for the setup on top of installation.
Yet again vendors can squeeze out more dollars from you by running a test or orientation run. Many vendors provide free online materials in their websites on how to operate the ERP, but unless you have the analytical patience of a programmer, you will need a face-to-face and step-by-step assistance, which your vendor will only be too happy to give you, for a fee.
Most likely, you’ll need more days to learn the ERP beyond the one-day testing. Vendors know this and many of them has a separate subscription plan just to train you. Usually you have a choice for silver, gold, and platinum packages, where the more expensive plan means you get more attention from your vendor. Likewise, you can also be charged per person, so if you have a roomful of staff to train, the total cost can really put your “bargain” ERP find in the red column.
If you’re getting a mobile access bundle, you’ll need to get a web host to access your server. This is minimal compared to the other costs spelled out here, but it is a yearly recurring cost. Likewise, since you’ll want a secured hosting and more bandwith to handle your data, you’re likely to pay more than regular web hosting packages.
Don’t expect your staff to openly use their personal smartphones for work-related activities unless you subsidize their mobile plans or, better yet, give them their business mobile phones so you can easily track user access. If you have a large pool of employees (sales and warehouses) who will use the ERP on location, buying their phones will easily jack up the total ERP cost.
So you think you found an affordable ERP solution? Check again. Because the published price is often the cheapest cost when you start to run the numbers on these number-crunchers.
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