Buying and implementing an ERP system involves lot of unexpected cost. The process of buying, implementing, upgrading and maintaining an ERP system can be staggering or it could be less than you think. So, how much does ERP implementation cost? The shortest and probably the safest answer would be it all depends on the size of the organization. But, in between that statement there are various factors involved. Let’s go a bit deep into the matter and see what actually determines the software implementation cost.
Factors that determine ERP implementation cost:
- The size of the company: Every company has their own set of requirements. While a manufacturing company will require a more complex and lengthy ERP implementation process, a professional company of similar size would be devoid of such huge challenges. Most ERPs have their price tag set according to the number of concurrent users. So in comparison, a manufacturing company might have to shell out something around $4000 per concurrent user whereas it would cost around $2000 per concurrent user for a professional company. As mentioned, the size of the company and the kind of ERP system it plans to implement matters a lot when it comes to pricing. For instance, costing involved in the implementation and maintenance of Microsoft Dynamics AX is more than Dynamics NAV. The simple reason being Dynamics AX is more suitable for large organizations having a strong international presence, whereas Dynamics NAV is best for small to medium-sized companies. Today, many solution providers like Accendo Technologies are ERP implementation solutions for businesses of any size.
- Cost involving implementation: Implementation cost depends on various factors like the size of the company, complexity of implementation, software integration (third-party), etc. Usually, implementation costs are determined via software to services ratio. If a company is able enough to handle the ERP system without the support of external vendors, chances of software-to-services ratio to become 1:1 gets more rational. Mid-sized companies with average complexity witnesses a software-to-services ratio between 1 to 1.5 and 1 to 2.5.
- Third-party software integration: Often businesses utilize third-part software to enhance and expand their existing ERP system. Though it is beneficial for businesses, but integration of such automatically increases the overall cost.
- ERP system customization: Another factor that determines a typical ERP implementation cost. In order to integrate the software in the workflow, most businesses resort to a certain amount of customization.
- Brand factor: Different ERP systems come with different price tags. So, the cost automatically goes up if you are purchasing ERP software that is costly.
The aforementioned factors play a pivotal role in determining an ERP implementation cost. But, the size and the industry of an organization is probably the most important factor that determines the implementation cost of such software. Usually, total software and services cost revolves around $200,000 to $700,000. Other additional costs incurred by the company are billed separately including hardware and infrastructure expenditures.
So, have you already implemented ERP system in your business? If not, then keep the aforementioned guidelines in mind while implementing such. After all, it’s your hard earned money that you plan to invest!
Endless debates on Microsoft Dynamic’s ERP systems have been floating all around the web for quite some time now. It is a bit confusing for businesses when parent software company, in this case Microsoft, launches four ERP systems under its much renowned brand Microsoft Dynamics, with each single system having their own set of utility factor. As mentioned the ERP systems offered by Microsoft include Dynamics AX, Dynamics GP, Dynamics NAV, and Dynamics SL. Among these four, Microsoft Dynamics NAV and AX are the most difficult to distinguish.
There are certainly many similarities between the two ERP solutions. For instance, both ERP solutions Microsoft Dynamics NAV and AX are customizable and available in many languages. Both the solutions have a pretty impressive and satisfactory installation base too. Both offer industry-specific services to cater to local and regional needs. Microsoft itself describes both their products as comprehensive ERP solutions that are capable enough to manage complex supply chains. And yes, both Dynamics NAV and AX can operate in a single, centralized location or across multiple decentralized locations. With so many similarities in functions and operations, it is not that easy to distinguish the two ERP systems. So, what’s the difference between Dynamics NAV and AX? Let’s dissect the two to find a solution.
Microsoft Dynamics NAV vs. AX:
- The ‘scaling’ factor: Microsoft Dynamics NAV is more useful for small to mid-sized businesses. The price tag of Dynamics NAV is puny compared to the powerful technology it provides to smaller businesses. With the implementation of Dynamics NAV, small and mid-sized businesses are being able to compete with organizations twice their size. Customizable and the ability to scale make NAV a firm favorite among businesses. On the other hand, Dynamics AX is tailored for enterprises having a strong international presence. Large organizations have to deal with magnanimous challenges including deployments across multiple international locations. Languages are different and so are the currencies, hence the scaling needs to be spot on. So, in comparison Dynamics AX can scale better than Dynamics NAV. But, for small to mid-sized businesses or SMBs, NAV still continues to thrive with aplomb.
- The cost factor: Dynamics AX is more complex than Dynamics NAV, simply because the former is designed for large organizations. While Dynamics AX requires superior and experienced project management and implementation team, any part-time project manager can manage Dynamics NAV effectively. Dynamics AX implementation is indeed a complex process and hence its maintenance cost exceeds that of Dynamics NAV.
- Managing end-to-end global processes: Dynamics AX does a better job here although NAV is pretty effective when managing decentralized global operations. But, when it comes to complex enterprise solutions requiring visibility across different locations in different countries Dynamics AX is more effective.
To sum it up, Microsoft Dynamics NAV and AX, both are equally excellent and effective for businesses. It’s just that both the ERPs have been built keeping specific businesses in mind. While Dynamics AX works for larger organizations having a strong international presence, NAV suits businesses which are spreading their wings in the international market. You can always consult software solutions provider s like Accendo Technologies to understand how ERP system works. So, which Microsoft Dynamics ERP works for your business better – the Dynamics NAV or AX?