ERP SOFTWARE

PRICING
GUIDE
Your comprehensive guide to the cost of implementing ERP software

GUIDE HIGHLIGHTS

The latest pricing information

from leading vendors

A comparison of the two major

ERP pricing models

Calculating ERP TCO, free ERP,

and more

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 INDEX
Written by experienced ERP project managers,
this guide will give you a headstart on your ERP
software pricing research, including:

3
Pricing Models

5
ERP Price List

10
Free ERP Explained

12
ERP Vendor Tiers

14
Updated: ERP TCO Calculation Elements

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 PRICING MODELS

ERP pricing models can offer a daunting challenge whether it’s your first system purchase, an active
operational upgrade, or a holistic migration from one platform to another. In order to ensure
accurate cost calculations, not only do you require a strong comprehension of company scale, but
you must also understand the intricacies of the multitude of ERP pricing plans.

For example, if you are a small business requiring extensive IT processing capacity, system cost
and capability must be considered to be highly-critical decision elements, as any move you make
can have a direct impact on daily financial operations. On the other hand, if you are a technology
manager at a mid- or large-scale company, while any ERP cost estimation should always be
considered carefully, the sheer size of enterprise resources tend to insulate less-than-efficient cost
decision-making, even though hidden impacts may create larger problems downstream.

In today’s typical ERP purchase landscape there are two generally accepted models to choose from.
These include; perpetual licensing, often associated with on-premise systems, and the Software as
a Service model (SaaS), often associated with cloud-based systems. Each model offers advantages
and disadvantages, however, a consideration of enterprise scale should again apply at the outset of
any business deliberation between the two. Please bear in mind that there are also hybridized ERP
price models available which borrow elements of the two models discussed below.

PERPETUAL LICENSE PRICING

Simply put, a perpetual license will allow you to use the licensed ERP system indefinitely. This model
has been well established for many years as it allows a company to host the software on their own
servers and provides them a well-defined initial cost of ownership.

Despite historical popularity, perpetual licenses are often a point of friction for small businesses
where the upfront costs and IT infrastructure requirements make a SaaS deployment the more
attractive pricing model. On the other hand, large businesses with established IT infrastructures will
often find that a perpetual license offers a lower total cost of ownership (TCO) in the long-term.

Aside from the large upfront cost, one of the primary disadvantages of this ERP pricing model is its
limitation on growth. Not only will a business have to add more infrastructure to keep up with their
current system requirements, but they may also struggle to make a required system change due to
high capital outlay at the start of the project.

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 SaaS SUBSCRIPTION

An increasingly popular choice for small businesses, SaaS subscription pricing for ERP provides the
system on an “on-demand” basis without lengthy contracts or large upfront costs. The cost of the
subscription is often linked to the number of users for a system or the volume of transactions.

As mentioned above, SaaS subscription is considered to be a good fit for growing businesses
due to the flexibility present in many ERP pricing plans. This flexibility may come in the form of
automated system upgrades, or a user plan which can be adapted on a monthly basis allowing the
growing business to manage system costs efficiently as they expand.

On the downside, speed of growth can breed complexity that can lead to resource cost spikes
driven by rapid and consequent growth. The impact is simple, while the system itself may be
efficiently paid for, managing any new activity typically requires more well-trained users performing
more tasks on the system.

To conclude, the differences between each ERP pricing model are primarily driven by scale,
followed by costs associated with outlay for licensing and hardware or infrastructure development.
Downstream of the initial implementation costs many other internal IT and ERP management costs
come into play as well, but these will be considered when we discuss ERP TCO.

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 ERP PRICE LIST
Pricing information from Q1 2019.
Check back for regular updates.

VENDOR PRODUCT MODEL COST SOURCE

Apero Solutions Apero Latitude ERP Perpetual License $2,500 / user i

Aquilon Software Aquilon ERP Monthly Subscription $79.95 / user i

BizAutomation
BizAutomation ERP Monthly Subscription $79.95 / user i
Cloud ERP

Blue Link Associates

Blue Link Elite Monthly Subscription From $500 i
Limited

Cetec Cetec ERP Monthly Subscription $40 / user i

$599 / user
DBA Manufacturing DBA Manufacturing Annual Subscription i
*minimum 5 users

From $55 /
Ecount Ecount ERP Monthly Subscription i
unlimited users

Epicor Software
Epicor Monthly Subscription $175 / user* i
Corporation

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 Equipsoft ERP Rapid $300 / user
EquipSoft ERP Monthly Subscription i
Edition *Minimum 10 users

ERPNext ERPNext Annual Subscription From $55 / user i

Exact Exact Max ERP Monthly Subscription From $319 i

Focus Softnet Focus 9 Monthly Subscription $120 / user i

Godlan SyteLine Monthly Subscription $166 / user i

From £7.99 per

HansaWorld ERP Standard Accounts Monthly Subscription i
module

MRP Plus Small From $750 between

Horizon Software Perpetual License* i
Business Edition 2-5 users

iDempiere iDempiere Free* Free* i

From free*
*Professional
Ilscipio Scipio ERP Free* i
starting at $5000
annually

Info-Power
ABW Perpetual License $1000 one time fee i
International

From $150 / user

Jonar Paragon ERP Monthly Subscription i
*Up to 25 users

$300 / user
JustFoodERP Foundation Edition Monthly Subscription ($95,000 i
implementation)
$300 / user
JustFoodERP Professional Edition Monthly Subscription ($125,000 i
implementation)

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 $300 / user
JustFoodERP Enterprise Edition Monthly Subscription ($300,000 i
implementation)

Kolibrys Kolibrys ERP Annual subscription From €7,500 i

From $380
KPI KPI ERP Monthly Subscription i
*For 5 users

Marello Marello *Free *Free i

Dynamics 365 for

Microsoft Monthly Subscription £143 / user i
Operations

Miles Business by Miles Monthly Subscription $99 + $20 / user i

My Office Apps Kechie Monthly subscription From $99 / user* i

Odoo Odoo Enterprise Monthly Subscription From €22.50 / user i

Odoo Odoo Online Monthly Subscription From €22.50 / user i

Onramp Solutions From $2500

Onramp Solutions Monthly Subscription i
ERP (unlimited users)

Open Systems ERP Traverse Monthly Subscription From $175 / user i

OpenBravo
OpenBravo Annual Subscription From €831 / month i
Business Suite

OpenPro OpenPro ERP Perpetual License $1000 / user i

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 Parity Corporation Parity Factory Perpetual License From $40,000 i

ProcessPro ProcessPro Premier Annual Subscription $3,000 / user* i

Rootstock Software Rootstock ERP Monthly Subscription $175 / user* i

SAP ERP SAP S/4HANA Monthly Subscription From $220 / user i

Valuechain DNA Monthly Subscription £50 / user* i

Vicinity
Vicinity Software Perpetual License $6000 i
Manufacturing ERP

Vienna Advantage
Vienna Advantage Not Available From free* i
ERP

Visionet HauteLogic Monthly Subscription From $190 i

xTuple xTuple Distribution Monthly Subscription $90 / user i

xTuple
xTuple Monthly Subscription $130 / user i
Manufacturing

xTuple xTuple Monthly Subscription $150 / user i

* Price displayed is an average cost per user, actual prices may vary. There is no such thing as a free lunch (or

free ERP in many cases). Be sure to read our explanation of free ERP on page 10. Where pricing sources are

hosted on erpfocus.com, pricing was provided directly by the vendor

HOW THIS DATA WAS GATHERED

Pricing information for ERP software is notoriously difficult to pinpoint as the costs involved can

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 display extensive variety from project to project . The information shown above was gathered from
a variety of public sources including, where possible, the vendor’s pricing documentation (click on
the source icon next to each product for more information). This data should be used as a rough
estimate of average ERP prices and does not constitute an official price quote. Please contact
[email protected] to report pricing changes.

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 FREE ERP EXPLAINED

In 1966 science fiction writer Robert Heinlein leveraged a 1930’s business adage, turning it into
the iconic literary acronym TANSTAFL (aka ‘There ain’t no such thing as a free lunch’) and making it
a centerpiece of his seminal work entitled ‘The Moon Is A Harsh Mistress’. While you may enjoy a
discourse on the book another time, our focus here is not the consideration of a work of fiction, but
rather how TANSTAFL may, or may not apply in the case of today’s free ERP software market.

CAVEATS OF FREE ERP SOFTWARE

From both research and educational perspectives free ERP systems can be a great way to learn
about the operating vagaries of complex software systems; particularly given today’s access to
cloud-based platforms. In this environment, sophisticated systems can be turned upside down,
tinkered with, or blown up entirely, with little negative impact other than the potential of wasting
installation time on systems that may offer neither complete documentation, nor direct support.
However, in the commercial world, time is money and any ERP technology based on a free pricing
model tends to offer a framework for processes at best, or time-engulfing black hole at its worst.

Beyond these caveats, free ERP software systems are rarely without a financial cost, since these
platforms require the same implementation, configuration, and maintenance expenses as any
other costed variant. Secondly, open-source or free systems can experience irregular performance
results due to an understandable lack of infrastructure investment behind the product. The point
here is simple; just because a system is ‘free’ it doesn’t necessarily follow that the product will be
provide good long term value.

Having said all that, there are some particularly good products on the free ERP market, with two of
the better choices discussed below:

OPENBRAVO ERP

At the mid-level OpenBravo comes to mind as a solid and quite scalable approach to the reduced
cost promise of web-based ERP. The system is modular in nature, and three variants offering a free
open source option, followed by a mid level system costing $4500 annually, and an entirely fleshed-
out enterprise level levelling out at $22k.

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 IDEMPIERE

At the ‘big dog’ level of free ERP, iDempiere offers a highly-sophisticated code base, clever user
interfaces, and deep reporting capabilities. Although the system is open-source and free, to get
the most out of the technology you should already have a well-trained IT group ready to handle
implementation and configuration, backed up by one or more third-party ERP consultants for
support. Depending on the scale of the target enterprise, costs to get the system running efficiently
can be as low at $5k, and at the upper end, as much as $250k annually.

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 ERP VENDOR TIERS EXPLAINED

The tiered classification of enterprise software systems originally emerged in the mid-80’s.
While the market has largely discarded this fundamental taxonomy, ERP system developers and
consultants have continued to favor and utilize the arrangement. Consequently, ERP systems are
often still categorized in a three-tier approach which should be considered whenever vetting the
scope, complexity and price of ERP software products.

In many cases modern ERP systems defy easy categorization as they are often defined by deep-
dependencies on third-party integrations, along with flexible system scale and functionality. Despite
this, you are bound to come across the ‘tiered’ system at some point during your ERP selection
decision. As a result we thought we’d offer a refresher on just what each tier covers, along with
what general pricing level is typically applied.

TIER 3 ERP VENDORS

This level is typically associated with customers that fall into an annual gross revenue range of $0 -
$20 million. At the low end of this spectrum the category is typically classified as being a ‘Mom and
Pop’ enterprise, while at the upper range the term ‘small-businesses in transition’ is often used.
In the former case, today’s fully-integrated SaaS ERP systems appear to be most favored primarily
due to initial purchase and implementation pricing, while at the latter level, hybridized systems,
utilizing both on-premise and SaaS platforms, had been the norm until recently but are now being
supplanted by mid-scale SaaS systems. Systems that are most compliant with this level are Intuit’s
SaaS platform and the like. Often these systems will offer a fraction of what a core ERP system
offers at a fraction of the price.

TIER 2 ERP VENDORS

This tier is typically favoured by enterprises that fall into an annual gross revenue range of
between $20 million - $250 million. At the low end more sophisticated hybrid systems exist, while
at the upper end more sophisticated SaaS systems are offered by brands such as Plex, Sage, and
NetSuite. These systems typically offer space to grow as a basic requisite, and intrinsic processing
elements are designed to scale easily over time, with a minimum of additional cost. These systems
are often offered alongside a range of other enterprise software products which can expand ERP
functionality through integration (with added cost of course).

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 TIER 1 ERP VENDORS

This level is typically applied to enterprises that exceed an annual gross revenue of $250 million.
At the low end of this tier, multiple fully integrated ERP modules, deep customization capabilities
and the support for mass relational data access exist. At the high end, well, nearly any statistical or
reporting issue that can be identified can be subsequently resolved. ERP vendors most associated
with this tier are SAP, Oracle, and Microsoft, while large tier 2 vendors such as Epicor, and Infor are
always pushing for inclusion. As one can imagine, there really is no limit to the upper cost ranges
for these implementations.

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 ERP TOTAL COST OF OWNERSHIP (TCO) ELEMENTS

The modern definition of total cost of ownership (TCO) was established in the mid-80’s by Gartner
Research, although prior to this event, the concepts of identifying, calculating and measuring
the cost of known operational expenses had been applied since the industrial age. However, the
emergence of new technologies, primarily in the form of computing and software systems, required
a different slant on previously accepted cost accounting methods. Consequently, in the ERP market,
the Gartner definition became the ultimate rule rather than the exception.

Without going through a formal discourse regarding TCO, in practical terms, the term total cost
of ownership suggests how much money an enterprise will be required to purchase, prepare for,
and initiate a full-span ERP installation. We’ll define four tiers of focus, however, please bear in
mind that every enterprise is different; so be prepared to apply your own subjective thinking to this
taxonomy.

NECESSARY ADDS

The goal of this section is to define and establish each term, so that enterprise knowledge
engineers can identify necessary focus items while attempting to discard as much hyperbole as
possible. Again, some tiers and/or individual elements may be irrelevant to your own situation, but
better to consider each element in your TCO calculation to see which applies, rather than miss
something important which later becomes a hidden cost.

CAPITAL DEVELOPMENT

In formal terms, this means “…the expansion of established firms.” However, the term can
also be applied when enterprises’ desire to grow business systems, such as the purchase, and
implementation of an ERP system, while mitigating impacts on measurable enterprise cash-flow.

From a TCO calculation perspective, measured costs can include:

Principal pay-back - original investment value including; opportunity costs and initial
purchase price etc.

Interest - the cost of borrowing to acquire or construct a long-term asset.

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 Potential pay-off penalties - additional costs calculated on the original investment value
including; late fees, payment schedule extensions, other administrative/legal costs etc.

Equity/share costs over time - extended costs relating to the completion, or modification of
investment monies associated with a final purchase. This element can also be calculated on the
basis of ‘share points’ where equity is delivered rather than being tendered as a cash value.

SOFTWARE

Digitized sets of instructions resulting in the manipulation, management, and consolidation

of individual data records, and/or a formal structure that delivers meaningful business/user
information. In the case of a consolidated ERP platform, this definition can be represented by one
or more modules integrated within a single system infrastructure.

Core platform – in ERP, this term typically applies to modules that relate to general ledger,
accounts receivable, accounts payable, payroll, and/or inventory; although in manufacturing,
it also specifically relates to a host of production elements such as scheduling, raw materials
management, and various other critical path modules.

Operational security – in the past, security systems were largely seen to be as discrete,
value-added components with the enterprise ERP segment. However, as cloud-computing has
become more prominent, fully-integrated security elements have emerged.

Nevertheless, from a TCO perspective, the cost of implementing a full-span security system
should be seen as a stand-alone component, in order to ensure that any affiliated costs are
identified accurately.

Low-level utilities – similar to security systems, today’s cloud-based systems typically include
necessary utilities as part of its operating infrastructure. However, while the cloud approach
appears to be emergent, certain enterprise types still demand more traditional approaches to
ERP operations.

For example, certain process manufacturers, such as pharmaceutical operators, tend to

appreciate hybrid or even stand-alone systems best due to necessary policy and/or regulatory
requirements. Consequently, TCO cost calculations must always be defined by constraints set
by the market itself.

Custom builds – this cost calculation typically applies to cloud-based systems, although hybrid
and stand-alone ERP systems have become so sophisticated that up to 15% of all resources
platforms encompass some level of customization. Consequently, in order to understand the
practical cost of a particular platform, all-in costs must be calculated and included within a TCO

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 analysis.

Linking code – in the same way that code customization has become critical to today’s ERP
operations, affiliate or linked code bases that connect current with legacy-based systems must
apply to any accurate TCO evaluation.

Training and educational applications – more times than not, TCO analysis fail to account
for training and educational system costs. Part of this problem relates to a perception that
knowledge-based systems are not typically seen to be relevant costs relating to the ERP
platform itself.

However, to be somewhat blunt, no one has ever seen a resources-based system run itself,
populate itself with data, or use resultant information to put a buck on the bottom line.
Consequently, don’t fool yourself when you’re calculating the cost of ownership of an ERP
implementation, because the ERP system doesn’t make money, well-trained workers do.

On-going training programs – as one might expect, this is a follow-on cost component
relating to core training/education. Sometimes, an enterprise may be able to simply run the
same workforce programs until folks get the point, but more times than not, they don’t for a
host of reasons.

Consequently, it’s always a good idea to leave some cost margin in the training budget just in
case that you have to try a different set of educational precepts.

Process re-engineering costs - your existing processes will need to be optimized to make
them more efficient, and improve or implement best practices instilled from your ERP. Although
this can be time-consuming, it can be a lot cheaper than the alternative of customizing an ERP
system to fit an existing (non-profitable) process.

Process auditing costs (both internal and external) - existing software processes need to
be evaluated and audited for many factors including system usage, functional ERP usage, and
to find processes which need to be further optimized for re-engineering. This means hiring
someone or having existing personnel perform an ERP audit which takes time, and we all know
- time means money.

SYSTEMS IMPLEMENTATION

Systems implementation is the process of ensuring that an information system reaches an overall
operational standard. Some process elements are more critical than others, and consequently,
demand more unconventional cost scrutiny at a TCO level. Here are some of the usual suspects.

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 Data migration – assuming that an ERP implementation is driven by an upgrade from one
ERP system to another, many folks fail to account for the cost of migrating one datastore to
another, newer, variant. Consequently, if you find yourself in this situation, mind this caveat,
since in many cases the cost of successfully migrating mass data from one system to another
can be from 10% - 15% of its final total cost of ownership.

Upgrades – in many cases, this cost component may appear to be as useful as calculating
the future value of a dollar, since it is largely based on something that hasn’t happened yet.
Nevertheless, take the time to investigate these costs and apply them within any TCO in order
to avoid any nasty surprises downstream.

Infrastructure testing – if this element isn’t being accounted for in a proper ERP TCO
calculation, it should be. Consider this, if a shiny ERP platform seems to runs like a pig, rather
than a racehorse, it’s likely that somewhere in the bowels of the enterprises’ infrastructure
something is slowing the whole thing down.

As a result, bear in mind that no enterprise system stands alone, even if it’s housed in the
cloud. So, ensure that you cost-account for any test programs to ensure that all pipes leading
to and from the ERP platform are free from bottlenecks.

Elements in this case include:

Systems testing – As the old saying goes, time is money. The more times you test an ERP
platform before you launch, the more stable that system will become. So, take the time to test
the ‘guts’ of your enterprise, while also costing out any time necessary to prove stability not
guess at it.

In this case, testing includes;

• Installation and initial stability

• Pre-move data stability

• Post-data-migration stability

• Module integration run-throughs

• Pre-launch stability

• Post spin-up tests.

Stand-in and special personnel costs - did you hire an ERP consultant during your
implementation? The consulting fee must be included in your total cost of ownership in an ERP

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 system implementation, as well as additional expenses they may accumulate.

Risk management - considering and identifying potential vulnerabilities, upgrade availability,

patch and future license management etc. This includes compliance assurance reviews, risk
prioritization, and internal sign-offs.

Scalability expenses - as your business grows, your ERP needs will likely grow with it which
means implementing new modules, adding more users, or upgrading the system completely
(if upgrades aren’t included in the purchase/subscription cost). If two years after implementing
you choose to add an additional 50 users, and two modules, then this needs to be accounted
for in your TCO calculation.

Project management costs - how much it costs to keep the implementation running
smoothly: this includes the cost of the team members keeping the ERP project on track, and
your project manager (internal or external).

Legacy platform decommissioning costs - your old system will be switched off and your
new system will be the new way of life, but there are important real-world elements to consider
such as closing your legacy system to new transactions, reducing availability of your legacy ERP,
and ultimately removing the legacy ERP completely.

PEOPLE

This tier should be self-evident; however, calculating how much a workforce costs, in terms of
defining an accurate TCO, can help make or break an enterprise budget after-the-fact.

This tier should be considered in the context of cost elements including:

Downtime and outage costs - this is the amount of time your system is offline, usually during
implementation, resulting in non-productive hours or hours when customers are unable to
submit orders.

Reduced productivity costs - i.e. acclimatization to the system, and diminished money-
making ability. Your employees’ wages remain the same, but their productiveness is limited
until the new system goes online. Don’t leave this ‘soft cost’ out of your TCO calculation or the
cost of buying a support program to cover the time lost.

ERP project team responsibilities - your ERP project needs to be equipped with your best
personnel to ensure your system meets all requirements, and implements smoothly. This
means that your ERP project team will be spending a lot of time on the ERP project, rather than
their day-to-day duties which means either providing cover for their existing position, or an

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 increase in labor hours.

All of these elements, along with virtually every other hidden element that costs more than the
price of a paperclip, should be applied to an ERP TCO in order to understand where one’s budget
is going. Cost, not revenue, is often the primary gating issue when it comes down to executing a
successful ERP project.

By now, it should be clearer than before that all critical elements relating to the development
and calculation of an accurate TCO are paramount. The best enterprise in the world, mated with
the most cutting-edge ERP system will fail if cost awareness is not maintained throughout an
implementation since this particular technical expansion sets up nearly everything else that follows.

ERP platforms are not like other enterprise systems since they tend to subsume every other affiliate
system, rule, and policy within a typical business operating infrastructure. Consequently, over time
the ERP platform itself becomes a most critical revenue driver and begins to forms the backbone of
all revenue bearing operations.

However, if an enterprise is unwilling or unable to understand its total cost of ownership at the
implementation, costs can run away over time. This lack of sensitivity can hurt a company’s bottom
line, and could even cause a complete failure. So, developing an accurate TCO process is important
as a general matter, but is even more necessary when it comes to an ERP involvement.

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 This guide was written by Rick Carlton, ERP Focus Columnist, with contributions from
Megan Meade, and Kathryn Beeson, ERP Focus Editors

For more exclusive ERP advice and resources follow ERP Focus on social media:

This guide was brought to you by www.erpfocus.com

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