* Pricing updated December 2024
Have you been searching high and low to understand what an ERP system costs? Have you been finding wildly different information? You're not alone. Figuring out what factors go into the cost when providers use different pricing models and methods can be confusing.
Enterprise resource planning (ERP) systems are an indispensable tool for businesses that want to streamline their operations, enhance efficiency, and stay competitive in the modern market. Before getting started, one of the most critical considerations is understanding the costs involved.
This article clears the haze around the main components of ERP costs, helps you understand their impact, and provides insight to make informed decisions during your ERP journey.
Like buying a car, an ERP system can have both one-time and recurring costs. Just as in the car-buying process, you have some control over what costs are one-time versus recurring (paying cash vs. financing), there are also some costs that you can’t easily reclassify. Let’s address the easy one first.
One-time costs of ERP systems
Only a few things truly fall into the one-time ERP system costs category. These costs are becoming less common as providers shift towards subscription models.
The items that can fit here are:
- Software licensing cost
- Implementation cost
- Cost for additional capabilities
ERP software licenses
Previously, ERP systems were sold through perpetual licenses, which indefinitely granted ownership of the software. Annual maintenance fees (more on this later) were also recurring costs associated with that purchase.
When Salesforce.com came on the scene, there was a (slow) shift toward recurring licensing.
Today, most ERP providers use a subscription model, especially for cloud-based platforms.
A few limited providers still allow you to purchase perpetual licenses. These ERP systems are on-premises—not cloud-based. These systems require you to manage or hire someone to manage the software and its associated infrastructure (servers, network, storage systems, etc.).
If you prefer perpetual licensing, you'll pay an upfront cost between $1,000 and $3,500 per user.
Implementation
The other typical one-time cost associated with an ERP system is for your initial implementation. The most common question that we get asked about ERP implementations is, “How much does an implementation cost?”
Let’s break it down with a clear answer: An ERP system implementation costs roughly the same as a new car. Like a new car purchase, an ERP system implementation has many variables.
Do you want basic transportation, or are you looking to drive a high-performance sports car off the lot? Do you want something from dealer inventory, or do you want to personalize or customize your vehicle exactly to your liking? What features and accessories do you want on your car?
Yeah, that’s not really helpful, is it? But it is accurate and true.
One of the problems with the ERP industry is the need for more standardization in implementations. Almost all ERP providers treat every implementation as a one-off. That's why you can’t go to a website and easily see how much an implementation will cost.
By now, you are probably thinking that ERP providers suck. Well, yes and no.
The lack of standardization is mainly driven by businesses that feel their needs are unique. Sorry to break this to you, but what makes you unique is only a very small fraction of your business. The rest can and should be as standard and efficient as possible.
The bottom line is that in the small to midsized business market, you should expect to pay anywhere from $20,000 to well into six figures for an ERP implementation. This varies depending on your business’s size, complexity, and amount of customization.
Additional capabilities
The final category of one-time costs for your ERP system is any additional capabilities you acquire down the road.
These costs come into play when you do things like:
- Integrate with another system
- Add new business entities
- Reconfigure your business (product lines, commission structures, etc.)
- Custom reporting and dashboards
It’s very difficult to give a cost range for these activities since they are very different in scope and complexity. Pricing here depends on the ERP system and how easy it is to configure and integrate.
Many ERP changes can be accomplished for under $1,000. However, suppose you implement something more complex, like a warehouse management system (WMS), and "need" customized capabilities. In that case, you’ll reach that six-figure mark.
One other note about one-time costs. Some providers are moving to a model with the implementation cost included in the monthly subscription. This means you may run into a situation with zero upfront cost for your ERP system. This can also happen if you self-implement (although few companies have the skills and knowledge on-staff to go this route).
Recurring ERP system costs
It’s no secret that, like streaming services and Amazon purchases, everyone wants to get in on the recurring revenue game (we’re no different, by the way). Ever since Marc Benioff brought Salesforce to the market, this has been the dream of technology companies everywhere.
The ERP industry is also entirely on that path. Licensing has shifted mainly to subscription models, and implementation is starting to follow. Other costs, such as support contracts, have also been around for a while.
Let’s start with the items we discussed as one-time costs first.
Licenses as a Subscription
A few factors greatly influence licensing costs. These factors vary depending on the software publisher's licensing model.
Still, they usually consist of a combination of the following things:
- Number of users OR transaction volume
- Modules being deployed
- Add-on products
A quick-glance comparison of the pricing for each licensing model looks like this:
- Subscription-based licensing: $50 to $200 per user per month
- Perpetual licensing: $1,000 to $3,500 per user paid upfront
- Consumption-based licensing: $1,500 to $6,000 per month for a multi-user instance
A note on the consumption-based pricing numbers: The price for the lower end is for a basic ERP instance (essentially a multi-user QuickBooks replacement on steroids). The high part of that range is for a moderately complex manufacturing platform.
An ERP subscription includes infrastructure costs. These can be significant if not done at scale and includes costs for servers, storage, memory, expert-level security, and uptime guarantees.
The break-even time for subscription licensing versus perpetual is 30 months or more.
When you factor in everything you would need to create an environment as stable, secure, scalable, and recoverable as the one from a software publisher, the calculation of the cloud subscription payback period is much more favorable than it seems on the surface.
Implementation as a Subscription
As with most things these days, implementation costs are undergoing a transition. It used to be the biggest line item in an ERP purchase, occurring upfront.
However, things are starting to evolve. Instead of an upfront time and materials or a fixed-fee engagement for system implementation, some providers are moving toward including it in the monthly subscription cost for the ERP system.
The amount that is included depends on several factors, including:
- The ERP provider’s desired payback period
- The potential cost (and value) of downstream support
- The licensing subscription cost
- Assumptions about inflation and other economic factors
Support as a Subscription
Another category of ongoing ERP costs is support plans. Think of your ERP support plan like a vehicle maintenance package—essential for keeping your system running smoothly and avoiding unexpected issues.
Like your car, your ERP system needs regularly scheduled maintenance, such as upgrades, implementation of additional capabilities, changes to business processes, new user training and education, new software feature training and education, new integrations, and countless other possible changes to your system.
Think of your ERP partner as a factory-trained technician who works on many vehicles and can help you with this (your ERP partner), or you can handle these functions yourself.
Each of these strategies has different costs. For example, is your organization big enough to hire internal staff to provide basic support for your user community, or is it more cost-effective to outsource this to an ERP provider that does it at scale for many customers?
An internal resource will cost at least $6,000 a month (depending on your market and needs). The cost for an ERP provider to handle your users’ basic system support and training will typically cost less.
A major factor in the cost of an ERP system support contract is the scope of work that your ERP provider does for you. Subscriptions range from basic end-user support (login help, training, and bug fixes) to a one-stop shop that does everything. Even with the one-stop-shop concept, the throughput you get from your provider may be limited unless you want to pay for a certain number of dedicated resources regularly. In that situation, you should probably look at bringing that function in-house.
Total ERP system cost
Determining the total cost of an ERP system requires understanding your business’s specific needs and complexity.
However, we don’t want you to read this far and not get an idea of what an ERP system would cost you. While the numbers below aren’t exact, they are a reasonable estimate of the total ERP system cost for various situations.
We compared pricing for Acumatica and other top ERP providers.
Ask if discounts are included in your quote and if they will carry over when you renew your contract. It's common for costs to go up—often significantly—after a contract ends.
At Stellar One, your price is locked for five years, and there aren't large increases when it's time to renew. Price certainty is important to you and your budget, so we make it important to us. See how our 5-Year Price Lock works.
The costs listed below DO NOT include potential annual or end-of-contract price increases, which you will likely experience.
Financials Only - Single Entity
| 1 – 10 Users | 10 – 50 Users | 50+ Users | |
| Implementation | $25,200 - $54,000 | $50,400 - $90,000 | $63,000 - $180,000 |
| Licensing (monthly) | $1,400 - $3,000 | $3,000 - $5,000 | $3,500 - $10,000 |
| Support (monthly) | $350 - $700 | $700 - $1,300 | $1,000 - $2,500 |
| Enhancements & Optimization (monthly) |
$200 - $450 | $400 - $750 | $600 - $1,500 |
| Total First-Year Cost | $48,600 - $103,800 | $99,600 - $174,600 | $124,200 - $348,000 |
| Recurring Annual | $23,400 - $49,800 | $49,200 - $84,600 |
$61,200 - $168,000
|
B2B Distribution
| 1 – 10 Users | 10 – 50 Users | 50+ Users | |
| Implementation |
$40,000 - $72,000
|
$70,000 - $110,000 |
$88,000 - $190,000
|
| Licensing (monthly) | $2,000 - $4,000 | $4,000 - $6,000 |
$5,000 - $10,500
|
| Support (monthly) | $500 - $1,000 | $1,000 - $1,500 | $1,500 - $2,500 |
| Enhancements & Optimization (monthly) |
$300 - $500 | $600 - $1,000 | $800 - $1,500 |
| Total First-Year Cost | $73,600 - $138,000 | $137,200 - $212,000 |
$175,600 - $364,000 |
| Recurring Annual | $33,600 - $66,000 | $67,200 - $102,000 | $87,600 - $174,000 |
eCommerce and Retail
| 1 – 10 Users | 10 – 50 Users | 50+ Users | |
| Implementation | $39,600 - $72,000 |
$70,000 - $108,000
|
$88,000 - $170,000
|
| Licensing (monthly) | $2,000 - $4,000 | $4,000 - $6,000 | $8,000 - $9,500 |
| Support (monthly) | $550 - $1,000 | $1,000 - $1,500 |
$1,300 - $2,500
|
| Enhancements & Optimization (monthly) |
$300 - $500
|
$600 - $1,000 | $800 - $1,500 |
| Total First-Year Cost | $73,800 - $138,000 | $137,200 - $210,000 | $209,200 - $332,000 |
| Recurring Annual |
$34,200 - $66,000
|
$67,200 - $102,000 | $121,200 - $162,000 |
Manufacturing
| 1 – 10 Users | 10 – 50 Users | 50+ Users | |
| Implementation | $50,000 - $80,000 | $100,000 - $115,000 | $125,000 - $215,000 |
| Licensing (monthly) | $2,800 - $4,500 | $5,500 - $6,500 | $6,900 - $12,000 |
| Support (monthly) | $700 - $1,000 | $1,500 - $1,700 | $1,800 - $3,000 |
| Enhancements & Optimization (monthly) |
$400 - $700 | $700 - $1,000 | $1,000 - $1,800 |
| Total First-Year Cost | $96,800 - $154,400 | $192,400 - $225,400 | $241,400 - $416,600 |
| Recurring Annual | $46,800 - $74,400 | $92,400 - $110, 400 | $116,400 - $201,600 |
Tips for ERP cost optimization
Adopt standard practices: Don't be unique where it isn't a competitive advantage
Your business should adopt standard practices. Don't be unique where there isn't a competitive advantage. The more you think your system has to be tailored, the more it will cost.
Your go-to-market strategy and product development are the places to be creative. Your AP processes and commission structure are not. (Please note that your unique way of paying commissions isn't helping anyone, not even your sales team.)
Use the standard business processes out of the box with your software for everything that is not unique to your product or a go-to-market differentiator.
Look beyond the sticker price for total cost of ownership (TCO)
Think long-term! TCO includes upfront costs and maintenance, upgrades, and support expenses. Evaluating TCO will help you make an informed decision.
Empower your team with an emphasis on user training and adoption
Invest in proper user training to maximize ERP software benefits. An educated team means fewer mistakes and higher efficiency, saving you time and money.
The right ERP platform is about more than price
While it’s important to understand the cost of an ERP system, cost shouldn’t be the sole determining factor in deciding which system to purchase.
The value of the process optimization, data-driven decision-making, and enhanced productivity that come with an ERP system can far outweigh the initial investment. A well-implemented and maintained ERP system can catalyze growth and a competitive advantage in today's dynamic business landscape.
Now that you know about ERP solution pricing in general, you might be interested in seeing some specifics for Stellar One. Get the full details on Stellar One’s pricing.