Sticker Price vs. True Cost
How much does it cost to replace a legacy software system? How much does a new Enterprise Resource Planning (ERP) software system cost? New technology, competition, and educated consumers are just a few things businesses should consider when evaluating the cost of a new ERP system compared to an existing legacy ERP or accounting software solution.
When you start listing out features like security, scalability, adaptability, and mobility, what’s the first thing that comes to mind? ERP sounds expensive, but is it really?
There’s more to consider when evaluating the total cost of your ERP, business management, CRM, and accounting software solutions. How much a new ERP system will cost is one thing—the bottom line on your investment five years later is another. In this blog, we’ll explore:
- The costs to consider when purchasing a new ERP software system
- How to measure your Total Cost of Ownership (TCO) and Return on Investment (ROI)
- Additional benefits of ERP systems versus other solutions
Calculating the Cost of an ERP System, Like Acumatica
Don’t let upfront costs hold you back. A new system is more than just the sticker price; a modern, cloud-based ERP software solution can offer benefits for your business that deliver a more significant ROI over five years than the initial cost of the software.
ERP software systems transform your operations. If you choose a simpler solution, you’re limiting your business’s growth potential. According to a study by Forrester, companies that use Acumatica see a 45% increase in enhanced operational efficiency, 15% improved gross margin, and 15% increased sales volume.
The price of a new ERP system isn’t just the upfront costs like hardware, software licensing, IT staff, and the initial implementation. It would be best if you also considered hidden costs, like an employee’s time and effort to implement the system, future system integrations and customizations, retraining, and upgrades.
5-Year ERP Software ROI
When calculating the TCO for a new ERP software solution, here’s what you need to consider when estimating costs.
- Current ERP Environment. Do you currently have an ERP software solution? If yes, is it on-premises or cloud-based solution?
- Number of Users. How many people are licensed to use your current solution? Better yet, how many people in your company should have access?
- Annual Revenue. How many transactions will you be managing using your ERP software?
- Sales. What percentage of your annual revenue is from project-based sales?
- Implementation. How complex do you expect the implementation to be?
- Support. How much do you expect to rely on your implementation partner for the initial implementation, training, and ongoing support?
These cost estimates help determine your 5-year expected ROI, including gross profit increase, legacy ERP maintenance savings, sales increases, avoided licensing and support costs, increased marketing budget efficiencies, and operational efficiency gains.
What Additional Benefits Can I Expect From an ERP System?
- Ongoing adaptability—a cloud-based ERP software solution like Acumatica grows with your business.
- Increased productivity by reducing data entry into multiple systems
- Eliminated manual processes in favor of streamlined, data-focused processes
- Integrated front and back office procedures for a complete company overview
- Mobility—work anywhere, anytime, from any device.
- Customized dashboards that allow you to make better decisions with better data
- Improved collaboration with stakeholders from outside of your organization (think suppliers and customers)
- Lowered upfront costs with a cloud-based SaaS solution.
Learn More About ERP Software and Acumatica
As a Gold Certified Acumatica partner, High Touch can help explore, implement, and support ERP software for your business. Contact us to learn more about Acumatica for your business.