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How Much Should A New ERP System Cost?

 

When you embark on the journey of buying a new ERP or accounts software system, you may feel that you are the first person to ask certain questions, but I can assure you we have heard them all.

In this blog I will share some of the frequently asked questions our sales team get asked on a regular basis.

 

Let's look at two of the most frequently asked questions as outlined below:

 

1. How much should I expect to spend on a new ERP system?

 

This is a bit like buying a vehicle, you can get a Moped for circa €2k or €3k or you can spend €100k and there are solutions at every price point in between.  In general, there are 3 different levels of solution available in the ERP / Accounts Software market:

 

  • Tier 1 solutions such as SAP, Oracle, JD Edwards, etc are generally chosen by publically listed companies who would expect to invest 7 figure sums in their business solutions.  These involve a consultant led approach and tend to take between 2 and 3 years for roll out.
  • Tier 2 solutions such as Intact, MS Navision, Sages X3, Exchequer etc are generally chosen by a wide spectrum of companies that would consider themselves as medium sized enterprises.  Solutions in this tier can typically range from between €10k and €250k.  The investment required will be dictated by the number of software licences needed and the volume of professional and consulting services the customer wishes to invest in to get the best out of the solution.
  • Tier 3 solutions such as Tas Books, Quickbooks, Sage 50 etc are chosen by small and medium sized companies who aspire to control the accounting function from their business system.  Solutions range from a few hundred euro to €10k and projects are generally driven by the customer themselves in conjunction with a local supplier.  Functionality is reasonably standard and processes are adapted to meet the functionality of the software.

In summary, you are limited only by your imagination and money.  You cannot expect a Tier 2 solution at a Tier 1 price.  The level of services you require will be dependent on the skillset of your employees and the value you wish to extract from your solution.  Services on Tier 2 solutions tend to be provided on a 'time and material' basis with fixed price projects incurring a surcharge.

 

2. Can existing data records be migrated to my new accounts system?

 

One of the major stumbling blocks a company faces when considering a change in their ERP, Accounting or Business software is the potential of no longer having their historical information readily available.

 

This information is critical in making purchasing decisions and also in looking at year on year sales analysis.  There are several ways of approaching and addressing this problem and I will outline them below.

 

  • At the very minimum, you will have access to your historical information in your old software which should be retained on premise.  Typically, companies 'save' this information on a server and provide limited access to the information to key users.  There may be some licensing controls which will limit access to the data and this differs from one product to the next.  You will need to discuss this at some point with your previous supplier to ensure that you have continued access to your data.
  • In most cases, it is possible to transfer historical stock movement information from one system to another.  There are a couple of major challenges which need to be overcome to get this result:
  • The ability to 'get at' the information in the existing software package – there is obviously no standard set for storage of information in a database and as such, it may not always be possible to find the relevant information.
  • The ability to extract this information into excel or csv in a format that is useful to the consultant assigned.  Not every software has tools available to extract the information and this often takes a serious level of analysis before it can be confirmed
  • The 'mapping' of the extracted data into a format that is recognised by the new system.  This can often take a significant level of human intervention to ensure that all the relevant fields and tables are correctly populated so that the new software can understand the information
  • Importing the data into the new system should not be taken as a given.  Systems such as Intact iQ have data import facilities that ensure that the data is passed through the business logic layer as it 'enters' the system giving a layer of validation that is not a standard in most other packages.

In summary, the answer is 'yes' but there is a significant amount of consultancy time required, which will have a resultant cost associated.  I would also recommend working with your consultants in advance to agree the 'scope' of the data that is to be transferred.

 

If you would like to read more information on Best Practice ERP Implementation download our free guide "ERP Implementation - Preparing for the Journey Ahead"

 

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