ERP for SMEs: how much can it cost to implement it in the company?

The use of an ERP solution in the business world has become essential for organizations. Regardless of the size of the company, today, an ERP system is a worthwhile investment, considering the benefits it brings to business performance.

Small and medium-sized companies, whose resources are usually more limited than those of large companies, should carry out a cost/benefit analysis before deciding on an ERP project. Hence the importance of having an order of magnitude of the prices of an ERP for SMEs. The more complete the management solutions are, the higher the price will be.

In this article, we talk about the aspects that influence the price of business management systems, how to choose the ERP that best suits an SME and the benefits that this type of tool brings.

What is the best ERP for an SME?

Before acquiring an ERP tool, the size of the company and its financial resources must be taken into account.

For an SME, it is important to take into account the indirect costs (sometimes considered as hidden costs within the plans offered by service providers) associated with the implementation of an ERP:

• Technical support and upgrades, taking into account that customers of an ERP software provider may require specialized support to manage their IT assets. This translates into having consultants available at all times to monitor the evolution of the tool.
• The equipment that will need to be purchased (hardware and other equipment). Additional computers may have to be purchased. In addition, it may take time to replace the old tools with the new software package. Adjustments have to be made, data has to be migrated.
• Preparing the IT infrastructure.
• Training of staff in the use of the tool.
• The time to install the tool on the various workstations (except for solutions operating in cloud mode). Sometimes, however, it is common for the service provider to install and configure its software free of charge.
• Auditing operations to be carried out in parallel to discover errors to be avoided when using the new system. In some cases, stock inventories may even have to be taken physically to start from a new clean base. Temporary staff may be hired if the work to be done is on a large scale.

Since an ERP allows to manage different business processes and has a positive impact on aspects such as:

• The supply chain,
• project management,
• warehouse management,
• human resources, etc.,

the increase in employee productivity is also a criterion to be considered and valued in economic terms, so that it serves as an incentive for SME managers to think about investing in this type of tool.

An ERP solution will be ideal for an SME from the moment in which it can determine how long it will manage to amortize the initial investment and the savings that in the long term can be seen thanks to the benefits that the tool brings in terms of management and finance.

How much does an ERP for an SME cost?

Answering this question concretely is complicated, considering that there are different types of ERP software on the market, many of which have been designed to offer plans that adapt to the economic and operational needs of a global set of companies.

This is why one of the characteristics of this type of solution is modularity: the software provider offers packages made up of different modules that can be accessed separately and completed as the company increases the number of processes to be managed through the management system.

When selecting an ERP tool, companies can choose between:

• Licensed products,
• online software (operating in SaaS mode).

Other aspects to consider when looking to choose an ERP are listed below:

It is worth mentioning that there are also free solutions, which are mostly software packages that offer a demo for users to try before having to invest large sums of money.

ERP information systems are available on DVD, but can also be downloaded and programmed from the Internet. Vendors often offer a trial version to prospective users to show them the benefits the product brings to their management. The trial usually lasts for one month, after which a license number must be entered to continue using it.

Not all the functionalities offered by a tool are always necessary. The requirements of a large industrial structure are not the same as those of an SME. Hence the advantages of SMEs being able to choose a version with limited functions at a more affordable price.

The scalability of an ERP solution allows it to be upgraded as the business grows and develops.

The more features a software package has, the higher the price of the ERP. The number of users can also influence the price. Complete solutions usually include applications for:

• Sales management,
• Inventory management,
• Purchasing,
• logistics,
• Maintenance,
• production,
• Accounting,
• Human resources.

Considering the above, there is no single ideal solution for your company. What there are are different types of ERP for SMEs and different types of solutions. We offer you some of our best comparisons so that you can consult them and choose the option that best suits the specific needs and specificities of your business:

• ERP for SMEs,
• Cloud ERP,
• open source ERP.

Because the options are varied and do not require the same budget, the decision to acquire an ERP for an SME is considerable. Even though the expenses that will be generated are important, the advantages that the tool offers end up making the acquisition more than profitable.

Benefits of ERP for SMEs

Finally, let's review how an SME can benefit from ERP software:

• The centralization of data made possible by the tool facilitates decision-making. The collection of data and statistics but, above all, their analysis, makes the company better prepared to react and take certain strategic initiatives for the business.
• This work tool also enables employees to respond more efficiently and effectively as soon as an event occurs in the company.
• Internal communication is improved, since problems related to poor information flow are limited, as information is recorded in one place.
• The productivity of the teams is increased by having better delimited and more efficient processes.

There are many software vendors that develop management systems designed to meet the specific needs of companies.

The need to implement an ERP in an SME may seem a postponable decision, especially if the investment is considerable. However, if the development of the SME and its production and operational processes are constantly evolving, the costs involved in this investment will be offset later by the unquestionable increase in business performance.