The total cost of an ERP modules (Enterprise Resource Planning) solution includes software packages prices, hardware prices, and ERP implementation costs. It ranges from ten thousands to ten millions of US dollars dependent on the number of users, complexity of the solution, the ERP modules vendor, and the implementation locations such as US, UK, Canada and Australia.
Costs and Prices of Top Commercial ERP Modules Management Systems
The best commercial ERP modules vendors usually provide good support services for their clients. Their products include Tally, Microsoft Dynamics (Navision), Navy, mySAP and Infor. The price of a commercial ERP system could be as high as $20 million plus a few million dollars per year for maintenance services for a client with 1,000 users.
There are various ways to reduce the pricing of a commercial ERP software package. For example, some of the Dynamics (Navision) resellers offer discount for Windows and Microsoft Office users.
For a small business with 25 users, the total cost of ERP ownership could be as low as $50,000-60,000. But for a medium-size company with 100 users, the cost could reach $400,000 as the complexity of the system increases. For a big company with 500 users, the cost could be 3-4 million US dollars or above. The average cost per user of a commercial ERP system can range from $2,000 to $20,000.
Best Low-Cost Open Source ERP modules Applications Download
Today many ERP vendors provide open source software for free downloading online and make money from support services. Using an open source program could significantly reduce the prices of ERP software packages.
For example, the average cost per user of an open source ERP solution could be as low as about $1,000. For a small business with 25 users, the total cost of ERP ownership could be as low as $30,000. For a medium-size company with 100 users, the cost could be below $150,000. For a big company with 500 users, the cost could be 1-2 million US dollars.
The top best free and open source ERP software systems include CK-ERP, Openbravo, Keen CRM/ERP, Jazz ERP, BlueErp, Adempiere, Compiere, Dolibarr, Postbooks, SQL-Ledger, ERP5, Fedena, GNU Enterprise, Opentaps, LedgerSMB, OFBiz, OpenERP, and WebERP. For more details of them, please check the article Best Free ERP Software Download Review.
But a business should know two facts before choosing an open source ERP solution:
Though the software programs are available for free downloading, the ERP modules and implementation services are usually as costly as their commercial counterparts.
An open source ERP vendor may not be able to provide excellent support services. This is one of the reasons why some ERP providers turn to be open-source.
Costs of Hardware and ERP Implementations
The hardware costs of an ERP system include the prices of ERP servers, computers for end users, systems software, network equipment, and security devices and applications. For a small business with 25 ERP modules users, the hardware can cost below $30,000. For a big company, the hardware costs could be as high as a few millions of US dollars.
The implementations of an ERP solution include training, customization, integration, data conversion and analysis, consultancy, and maintenance. A company can compare the service prices among different vendors before choosing a right solution.
ERP in Manufacturing Can Increase Throughput
MRP – Materials Requirement Planning – was a precursor of today’s ERP manufacturing software, which covers much more than materials planning. The manufacturing module helps with all stages from product design and engineering through production scheduling and work-in-process monitoring to quality control. It can also interface with supply chain and customer relationship modules, providing complete control over the core business processes.
ERP in Manufacturing Processes
Manufacturing is typically viewed as shop floor operations that convert raw materials into finished products. ERP manufacturing modules, however, view it as much broader and incorporate tools to help with Product Design, Production Engineering, Production Planning & Scheduling, Real-time Monitoring of shop floor operations and Quality Control. We now look at these functionalities briefly.
Manufacturing ERP Software: Design Functionalities
Product Design: The design process involves developing a product to meet specific needs using available technologies. The final product must meet performance, usability, safety and optimal cost parameters. With the massive data in its databases and speed of processing, ERP can provide just the right kind of data, and also help complete the design process more effectively and faster.
Production Engineering: Translating the design into manufacturing requirements including Bill of Materials and Routing Information is not only quicker, but can conform to best practices using modern manufacturing ERP modules.
ERP as a Manufacturing Planning and Operational Resource
Production Planning & Scheduling: This is the function that considers available resources and existing constraints, and develops plans and schedules that maximize shop floor throughput. The powerful modeling facilities of ERP modules can help immensely with this complex task.
Mobile Transactions: Mobile transactions using radio-frequency devices and PDAs can capture data from the field and transfer them efficiently to the main data repositories. Data entry requirements and delays in availability of reports can be considerably reduced as a result.
Monitoring Shopfloor Operations: The up-to-data data capture facilities and extensive analytical modules of ERP manufacturing software helps real-time or near real-time monitoring of emerging bottlenecks and variances from plans. Interfaces with SCM modules, for example, can help monitor timely delivery of supplies by vendors.
Quality Control: Monitoring critical quality data such as yield, defects and supplier performance help achieve more effective quality control.
Speedy Adaptation to Changes: Even the best of plans are subject to unforeseen changes, and ERP software’s capabilities to quickly rework plans and schedules, including routing, can help minimize the throughput impact of the sudden changes.
The overall result will be higher throughput, better quality control and reduced costs, which are the key objectives of manufacturing operations.
Manufacturing ERP software has robust and extensive capabilities that enable it to help with all issues involved in utilizing resources to maximize shop floor throughput, at the same time ensuring higher quality and lower costs. The interfaces with other modules such as supply chain management, and the best practice routines help control all these aspects far more effectively than possible with traditional software tools.
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