How much does an ERP for SMEs cost?

If you have a small business and you have decided to implement a management system, congratulations! You have made the right decision that will bring you many benefits. But you may be wondering, how much does an ERP for SMEs cost? Can I afford the investment?

Some time ago we published a post where we talked about the prices and costs of management software in general, so today we are going to focus on how much an ERP for SMEs costs, that is, what solutions are on the market specifically oriented to small businesses and how much they cost.

Obviously, we can only give you general information about the solutions available on the market, because each company has its own rates. If you want more specific information, we invite you to consult the rates of our ERP for SMEs Secre.

Which ERP solution is the best for SMEs?

There are different types of management software on the market, we already talked about them in depth in another post, but in short you will find:

The most common is that they offer you two options for storing your database: on-premises or in the Cloud. Having your ERP locally means that you will only be able to use it on the computer where you install the software, since the database is hosted on it. The Cloud allows you to access it from any place and device since your information is stored in a Cloud server that you rent from your provider.

Tailor-made or pre-designed: tailor-made management software is programmed according to the specific needs of the company and adapted to its particularities. Pre-designed" management software has been programmed taking into account the most common needs of companies and requires you to adapt to its operation. A customized software is usually much more expensive than an already designed solution.

Free or proprietary software: free software works with open source, that is, if you have a computer team, you can make changes to the software. Proprietary software is closed and can only be modified by the company behind it.

Depending on the way the software is marketed, you will find programs for a monthly fee and programs that you buy once and enjoy for life.

What type of ERP is best for your small business?

Obviously, you are the one who can best answer this question, but I will leave you my opinion for your consideration:

Choose a Cloud ERP if mobility and agility in management is of special importance to you, that is, if you or your workers need to work outside the office or at any time without being conditioned to use the software on a particular computer. In Aplimedia we usually recommend this option also for security reasons: in general, ERP software providers in the Cloud usually have security protocols for databases much more complex and secure. However, if mobility is not important to you because you always work from the same computer, and you are also confident that your security protocols are sufficient, on-premise ERP options are perfectly valid.

Honestly, and in our experience with hundreds of SMEs, most of them do not need a customized management software, or at least not from scratch. It is very likely that there are already management solutions on the market that meet your management needs. Custom software tends to have an unattainable cost for most SMEs, and taking into account how complete many of the ERPs on the market are, they are probably unnecessary in your case. If your case is more specific, you can always ask your supplier for a quote to custom program those particular needs to your management within their ERP solution.

Free or proprietary software? It depends, do you have a team of IT people who can dedicate time to programming? If so, are you compensated for the hours they will need to dedicate to this programming or is the cost of those hours excessive? The most complete management software for SMEs on the market is generally proprietary, i.e. if you have a team of IT staff, it is not going to be possible for them to make changes to the program. In any case, small companies do not usually opt for open source software. Consider whether it is really worthwhile to buy open source software and dedicate the necessary hours and resources to it.

Regarding the way to market the software, again it depends on your particular case. In Aplimedia, for example, we only sell our management software with a monthly fee because we consider essential certain added services that require daily work and without which, in our experience, it is not possible a satisfactory management in the long term. I am talking about services such as technical support and maintenance, program updates, training in its use, customization of budgets and invoices, backups and server rental for Cloud users... When you buy an ERP, normally, it does not include all these services, with the risk that this entails: failed implementation, poor knowledge of the software, incidents and technical failures of the program that result in large losses of time and money, obsolescence after changes in legislation or taxation ... Hiring an ERP by monthly fee gives you the advantage of being able to unsubscribe at any time and without having made a very high investment if over time you detect that the software does not have the features you require or if you are not happy with the service.

Okay, but how much does an ERP for SMEs cost?

It is difficult to generalize in this area. There are many ERP solutions on the market and their marketing models are radically different from one to another.

There are ERP vendors that sell their software for a monthly fee starting at just a few euros. Normally, the cheapest rates of these providers are quite limited and simple, and do not usually include all the modules of the program. Adding modules or services (such as technical support or training) usually increases the monthly cost, and so does the number of users. This type of provider can offer you rates as low as 8 or 10 €/month, although there are few companies that can provide a complete management with the services and functionalities included in these basic rates.

There are also free options on the market, which are usually either extremely basic (perhaps suitable for freelance users who do very little management) or open source. However, as I have already mentioned, free software is not really going to be free, since you are going to need a team of IT people to invest a good amount of time in it.

Other providers, as is our case in Aplimedia, offer a single affordable rate that includes all the features of the software and all the added services and that, at most, may vary depending on the number of users or modality chosen. Our rates, for example, vary according to the chosen modality or the number of users, although you can find very different rates in the market. You should look for a provider whose ERP meets all your needs (and if not all your needs, who offers customized programming services) and who, of course, you trust.

Do not underestimate the importance of selecting a serious supplier: a management software is vital for the proper functioning of an SME and poor service and maintenance can affect the day-to-day running of your business.

On the ERP purchase options there are also very different prices in the market, but a solution oriented to SMEs could be in a range of 5,000 to 20,000 €. Of course, if we talk about more complex solutions oriented to large companies with really particular management needs, the cost can be hundreds of thousands of euros. If you consider such an option, make sure that you have services such as support, training or updates so that your software does not become obsolete.

Indirect costs of an ERP for SMEs

So far I have talked about the direct costs of hiring a management software, that is, how much you will have to pay your supplier monthly or in total if you opt for the purchase of the ERP.

However, I do not want to leave out the indirect costs of implementing management software:

The hours required for your training and/or that of the company's employees who will be working with the software. This investment in time will be necessary especially in the first weeks or months after the implementation. There are more or less simple and intuitive solutions on the market, but I would dare to say that all of them, without exception, need a period of training and adaptation so that your company can start up satisfactorily. However, take it as an investment: once your team is used to this new way of working you will see enormous benefits in the work system and an optimization of the use of time and resources.

If you request custom programming to cover very specific needs of your company, your supplier will usually quote you for the hours needed to introduce these changes in the program. Obviously, the cost of this programming will vary greatly depending on the magnitude of the changes to be implemented.

If the vendor you select does not include services such as upgrades, training, technical support or software maintenance, they will most likely charge for those services separately. It is unlikely that you will be able to fully operate the software without these services, so you should consider these costs in your cost projections.

Hardware costs: most ERPs do not have excessively high hardware requirements, but at the very least you will need a fairly modern computer on which to install the program (or its access in case you opt for the Cloud). In some specific cases you may need complementary equipment to the ERP, such as a point-of-sale terminal, a printer, a labeling machine...