ERP implementation cost

The total cost model was originally developed by Garner Group in 1987 to analyze the costs associated with procuring, implementing and maintaining an information system for a specific period of time usually from 3 to 5 years. These include software licensing costs, deployment costs, costs related to upgrading information systems, and annual maintenance costs by suppliers and internal.

According to research by Meta Consulting Group, only about 20% of businesses deploying ERP solutions understand the total cost of their deployment. The remaining 80% do not understand and fully recognize the associated support costs and infrastructure costs. Therefore, these businesses often choose cheaper software and think it is economical. In reality, these systems are low cost but with the addition of hardware and development costs over time can be very expensive. It is often difficult to give an accurate total cost, because each industry, each business will have its own characteristics and different requirements (requirements) so the cost will be different.

Copyright costs

Copyright cost is the initial cost to use the software. This fee includes the software license fee (license), the module number (module), and the number of users (users). The cost of copyright in Vietnam for a package of copyright is usually about 300 to 50,000 USD.

As a general rule, packaged applications are often cheaper than self-written software according to business needs because packaged software is developed to be shared with lots of users.

Cost of deployment

This is the cost of implementing the system (ERP), including the cost paid to the service provider and the cost of the technical staff involved in implementing the ERP system. For complex projects, the deployment cost can be equal to 5 times the cost of the copyright. But in Vietnam, it is rarely that high due to the low level of complexity.

There are some projects that fail due to unforeseen risk factors such as requiring the user not to be clarified, not fully understanding the time and cost needed to deploy, choosing the wrong modules. , wrong system configuration, … These factors are completely preventable in advance. The (technical) consultant team will help businesses analyze the current system, access the right solutions and let businesses see the real benefits after implementation, and the consultants are also directly deploy the system.

Based on vendor quotes, with Vietnam’s average ERP products deployment costs range from US $ 6,000 to US $ 75,000, with an average of US $ 40,000 equivalent to 100% of the copyright costs and varies greatly according to. However, the domestic software development costs only about 15% of the copyright cost, but often the suppliers quote at a very high price.

For international high-end ERP products, the deployment cost is often much higher than domestic developed ERP products.

The cost of upgrading the infrastructure system

Other expenses include upgrading and adding information infrastructure systems such as copyright of data management systems, application servers, high-speed transmission lines, connecting devices and computers and servers. The cost of the infrastructure system also depends heavily on the needs (requirements) of the business, some businesses will want a system with the fastest processing speed, and some businesses only need one system. The system is stable enough to reduce costs. The average server usually ranges from 500 to 6000USD. Network setup costs usually range from $ 100 to $ 300 per network component.

Annual maintenance costs

Annual maintenance costs are usually charged by software vendors as annual service fees for fixing problems, and updating new versions. Annual maintenance costs are usually between 8% and 20% of the license costs, but usually 20%.