ERP

ERP Pricing

The details of ERP pricing and ERP system design have traditionally been market driven. Like many business oriented software models, ERP business management tools have been developed and targeted with enterprise level business clients in mind. ERP pricing originally fit the framework of the earliest integrated business solutions developed to facilitate back office business functions specific to manufacturing. Earlier systems were elaborate and expensive, and single and muti tier server architectures were required to run applications and house shared data bases. The purchase and maintenance of these architectures required a full time IT staff. These features, and the complexity and duration of the ERP implementation process often meant that ERP pricing placed integrated solutions beyond the reach of companies with restrictive budgets.

The ERP pricing landscape, and the market landscape in general, are changing. The future remains somewhat uncertain, but ERP pricing structures are bringing integrated software systems increasingly within reach of smaller enterprises, even as integrated business management tools become more sophisticated and industry specific.

Large vendors and providers such as Microsoft, SAP and Oracle first came to the foreground in the ERP implementation market during the early 1990s, and their profiles increased as the popularity of ERP systems surged. Most of the implementations that occurred during the mid and late 1990s were contracted by large manufacturing firms, Fortune 500 companies and government offices and universities with large software budgets. ERP pricing structures were developed around the complexity of these implementations and the breadth and depth of the business management tools required by these clients. Market demand also played a role, since many of these business clients wanted timely installations that would allow them to be free of their legacy software systems before the transition to the new millennium. 

At this point, the millennium has passed, and since fully integrated ERP business solutions expand as a company grows, the enterprise level clients that installed recent systems won’t require new software platforms for many years.  ERP pricing is changing to reflect a market shift. While implementation demand cools at the highest levels, smaller and mid-sized businesses have had a chance to observe the investment returns that result from successful implementations and have started showing interest in installing platforms of their own. As small businesses demand products that fit within their budgets, vendors and providers have begun to turn their attention toward meeting this demand and competing for available market share among smaller budget clients. This means changing ERP pricing structures and adapting product suites and make them less expensive. It also means partnering with businesses that cater to small business ERP clients, like hosting and outsourcing solutions. As ERP pricing structures and product suites evolve, more businesses can take advantage the benefits of integrated solutions.

Written by :

tracey boxer