How to Purchase an Affordable ERP

By Neil Zawacki
Updated: August 15, 2011

Enterprise Resource Planning (ERP) allows a company to integrate its business functions through a single unified platform. It’s also tends to be expensive to implement, putting it out of the reach of many small businesses. This guide will provide several tips on how to purchase an affordable ERP system:

You will want to start by identifying your company’s specific needs. A typical ERP system will include the following (and more):

Inventory Management
Purchasing and Receiving
Material Requirements Planning
Project Management
Accounts Receivable
Royalty Tracking
Customer Order Processing
Shop Floor Control

Is there anything that you can get rid of? If you don’t truly need a particular module or feature, you may be able to save money by not including it in the system. A lot of ERP solutions are ‘mix and match’, so you should have a great deal of versatility with what’s included in the purchase.

The next step is to contact an ERP vendor and issue a RFP (Request for proposal). This will allow you to ask direct questions about the pricing structure so you can determine what you’re actually going to have to pay for the system. Don’t be surprised if the price jumps quite a bit from what was advertised.

You’ll also want to research the vendor’s status in the business world. If they’re still obtaining new customers, it’s a good sign that they’ll be around in years to come. If they’re mostly living off maintenance fees for existing companies, they’re probably not as stable and represent a greater risk. You obviously want to save money, but it will be for naught if they go out of business a few months later.

You should then contact other vendors and find out the same information. It’ll take some time and effort, but you’ll be able to figure out which offers the best deal. You don’t necessarily want to go with that system, however – you may be able to save additional money by contact the earlier vendors. You’ll have a competing bid, so they may be willing to lower the price or throw in extra modules.

Keep in mind that an affordable ERP system may end up costing more than a standard system in the long run. The software may not be as stable or productive and the technology is likely to become obsolete that much quicker. If you can afford to pay a bit more for the solution at the outset, there’s a decent chance you will get a much better return on investment.

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