How Much Does ERP Software Price In India?

Introduction

In a dynamic marketplace, businesses cannot be effective if run in an ad hoc manner. You have to optimize daily operations and find automated solutions. In the last few years, global companies have seen a sort of digital resurgence. They look towards cost-efficient ERP solutions to streamline various processes.

The best ERP systems automate various operations with a single-window to manage. They digitize supply-chains, accounting, customer relationships, sales, and marketing. They also manage procurements, projects, risks, and compliance at a low price mechanism. Check the ERP software price in India and choose the best solution.

Fortunately, customers can opt for an on-premise or cloud-based ERP based on their budget and requirements. They can plan and execute a tight budget to minimize resource crunch. They can choose the best proprietary or open-source ERP solutions. The costs are in the range of 60k to 20 lakhs based on features, total users, functions, etc.

Value of ERP Solutions

Enterprise Resource Planning or ERP is a complex and essential business process. Automated solutions hasten operations without affecting accuracy or quality. And the digitized system benefits micro-scale to large enterprises. But still, be clear about ERP software price in India so that you do not burn your working capital for a software package.

Luckily the best ERP system or service comes in modules. These automated components manage specific business operations, and you can choose an appropriate solution with some or many functions. They include inventory, finance, payroll, sales, marketing, HR, operations, and so on. 

Or you can choose a comprehensive, integrated ERP solution. You can get a reliable software package for around 1.5 lakh to 2 lakh Rupees. For a corporate, there are global brand ERP software packages. Their cost range is 25 lakh to 1 crore, but for SMEs, many vendors offer 5 to 6 lakh worth packs. India’s small and medium enterprises have around 1000 employees. They earn revenues in the range INR 25 lakh to 10 crores per annum, particularly in the manufacturing sector. They don’t have to give ERP access to all the users or company employees. So, the cost in the range of 60,000 to 3 or 5 lakh Rupees is affordable.

Implementation Costs in India

The ideal business solution has to match a company’s budget. It should be cost-effective and match specific business requirements. Do some research and invest positively after finding out the exact ERP software price in India. Remember that it is a one-time, long-serving managerial decision.

ERP vendors offer a wide variety of impressive solutions. For example, Catalysk is a free ERP software for a single user. If you have to add more users, then the pricing policy kicks into action. And there are vendors like ERPNext whose inexpensive offers cost INR 4000 per user per year. 

The implementation costs play a significant role when you consider customized solutions. A construction magnet or a real estate or travel agency has specific needs. The ERP set-up price can range anywhere between INR 20 lakh to INR 40 lakh. 

There are also large corporate providers like well-known SAP. Here, the ERP specialists configure, activate, and maintain a total solution. This high-end market product will cost anywhere between INR 50 lakh to even one crore Rupees. 

The implementation prices depend on several factors such as:

• Choosing the license fees and setting up a system for X number of users

• Installing a set of training modules that improve employee acceptance

• Selecting a rich set of features that are in tune with the company’s needs

• Customizing the solution with sales, HR, marketing, CRM, etc., modules

• Ensuring anytime, anywhere access with mobility features (Smartphone apps)

• Tackling legacy compatibility issues and improving data migrations

For implementing a complex solution like SAP:

1. Implementation Period – 6 to 9 months in a phased manner
2. Total number of end-users – 200 to 600 

Cost-Effective Criteria

Some vendors offer a fixed price for their proprietary ERP system. But these solutions also have a fixed number of features and modules. You can also purchase a limited number of licenses from them at a static price. Beyond those vendors, ERP software price in India is entirely dynamic and unpredictable.

The variability in costs is mainly due to the associated factors. Apart from the implementation strategy, you have to look at the total number of users. The infrastructure needs, in terms of hardware and software also have to be accurately calculated.

Also, there are many other generic and business-specific requirements. They include add-ons, type of databases, backup options, reporting tools, on-site or remote connectivity, etc. Some vendors are transparent about their up-front prices. They don’t have hidden, additional costs. 

For example, A vendor like Dignitech offers ERP software at INR 25,000. You can also purchase industry-specific software in the range of INR 12,000 to INR 20,000 per annum. It is a web-based, customizable solution that handles procurements, HR, finance, and supply chain operations.

Low-Cost Ideas

• Choose a solution with a one-time purchasing cost only

• It should not have any recurring subscription costs either

• Do not ask for too many customization options in ERP software

• Limit the total number of users and their accessibility options

• Go for low-cost add-ons instead of upgraded license fees

• Accurately calculate all the hardware and software demands

• Negotiate annual maintenance and support costs beforehand

• Do an early calculation of the 18% GST and other state-level taxes

• Assign a project manager or team leader to liaison with vendor experts

Costs of Customization

The deployment of an ERP solution is fraught with many dangers. You have to prepare, plan, and execute a viable deployment strategy. Fix a budget and stick to the schedules to minimize the implementation expenses. Also, make sure you reduce the higher costs of ERP customization.

The ERP software price in India goes up due to business-specific demands. For example, the fashion business has very little in common with a real estate company. A generic, off-the-shelf solution may lack all the necessary features. Companies find it best to have a customized solution to satisfy the client’s requirements.

But this customization process is not simple or straightforward. For example, consider a manufacturing company with five factories or sites. A full-fledged ERP platform with all the business-related core functions and additional customization features will be costly.

Its deployment costs are estimated anywhere between INR 4 lakh to INR 15 lakh. Don’t be perturbed by the price as the solution is comprehensive. The company receives an ERP solution to manage purchases, sales, inventory, finance, and shipping.

The high-priced solution also offers CRM and customized tender management. And the company’s business documents are all customized. The business logic and workflows also get streamlined and set-up for result-oriented productivity.

Customization is just to the on-premise systems alone. You can also choose an integrated cloud solution and get charged for the total services per user per month or year. And there will be no monthly rentals on the vendor-provided hardware and software.

The customization costs can go down by opting for a vanilla ERP. It is an out-of-the-box deployment technique without core design modifications. 

Also, Read: Why Consider Custom ERP Solutions for Your Business

The traders and affiliated service providers have to pay a standard cost. The estimates range between INR 250K to INR 1200 K. The buyer receives a fully customized, integrated solution with service management systems and all the ERP modules.

Real estate builders, developers, and agencies benefit from customized ERP. The solution costs range between INR 800K to INR 2000K. But, the buyer gets a single platform to manage all the complex needs. He has multi-device, multi-location access to project and sales management system. He can also manage the employees, brokers, and customer networks with ease.

Cost estimation percentages by ERP activity:

1. Customization  – 40%
2. Re-engineering – 30% to 35%
3. Training Costs – 35% upwards
4. Upgrades/Updates – 30% plus
5. Integration Costs – 28% to 35%
6. Maintenance Costs – 28%

Why does customer support matter?

There are no cheap ERP solutions, as the system is very complex. The cost estimates have to factor in licensing, subscriptions, deployment, data import, and export. Besides, the costs of hardware, software, maintenance, and training cannot go unnoticed either.

The ERP software price in India depends on a large number of unavoidable expenses –

1. Personnel Costs

Legacy systems and data conversion require expertise. The IT team has to get augmented by spending on hiring new talent. Specialized consultants also charge by the hour, and their services are indispensable for complex deployments.

2. Training Expenses

Training is a hidden and hard-to-estimate cost for any business. The new software has different file formats, documents, purchase orders, etc. From the managers’ point of view, it also has innovative report generators and analytics tools. You incur training expenses to make employees more skilled.

3. Testing Solutions

Scripts, modules, and other functional components have to get tested. You have to ensure legacy and device compatibility. Besides, the process workflows have to get checked in real-time to prevent business breakdown. Such testing requires more resources and capital. And automated testing apps cost even more as they speed up the operations.

4. Customization

Customization and integration are essential for new ERP solutions as these two deployment techniques ensure business model compatibility. The ERP features and functions will satisfy the company’s specific processes. They include anything from payments to user interfaces. 

5. Employee Co-Option

Consider employee satisfaction levels while implementing new solutions. The ERP software price in India has to factor in adaptation. Yes, the workforce has to undergo training and be cajoled and promised higher salaries. Otherwise, they may resist, non-cooperate, or delay the system.

6. Re-Engineering

Not many ERP systems factor in specific business dynamics. The company’s needs and business processes may undergo drastic changes. If the ERP solution is not scalable or flexible, then problems arise. But, re-engineering is a lot cheaper than customization.

7. Ongoing Maintenance

It is easier to manage all of the above costs with adequate support. Always choose a vendor that offers transparent maintenance services. He has to be upfront about the cost of support, be it cloud-based ERP service or on-premise software. Consider the recurring support fees when you initially budget for the ERP product.

Cost-Benefit Analysis

As a discerning consumer, you have to do a cost-benefit analysis. Never forget the returns on investment when you purchase a tech-based solution, especially when you are spending a considerable amount of money from your capital. Thus, analyze the ERP software price in India with factors like efficiency, productivity, flexibility, etc.

Lower costs are desirable, but they are not the only criterion. If you want a cloud-powered ERP solution, then be willing to spend. You will receive benefits in the form of powerful analytics, mobile-friendly access, and social media integration.

The benefits have to emphatically outweigh the incurred costs. A higher return on investment (ROI) has to be legit within a time frame. But, a detailed analysis should factor in the intangible benefits and still be quantitative and focus on financial performance and net profit margins.

Business-Friendly ERP

Remember, around 90% of businesses get satisfied with ERP solutions. Their capital expenditure is in tens of lakhs of Rupees. And they also incur recurring costs in the form of subscription fees and maintenance charges. But still, the ERP software price in India is very well justified by them.

It is because of the large number of benefits received by the business over a long period –

• The business-friendly software is completely integrated with the workflows

• It has data-intensive features and functions to ensure reliability and accuracy

• The ERP solution automates and simplified crucial business processes

• Managers’ stress levels come down due to the all-encompassing services

• Team communications and information access become secure and fast

• Employees are satisfied and they contribute to value-added activities

• Productivity increases at all levels, from executives to the senior cadre

• Senior managers make efficient decisions based on reports and analytics

• The company’s vision and socio-cultural ideals can be realized quickly

Tips to Cut Down Costs

A Case Study

Air India, a low-cost airline, experienced a severe crisis in 2009. Its passenger and cargo services were failing. They had to adopt best practices, reduce costs, and increase accountability. Their turnaround plan’s budget included the ERP software price in India.

They implemented a well-designed SAP solution in multiple phases but they faced major implementation hurdles. 

The main reason behind these hurdles was a lack of coordination, delays, and data consistency. The project team learned essential lessons in reducing tech acquisition and maintenance costs.

Useful Tips

• Select a vendor who charges transparent prices without hidden costs.

• Prepare detailed cost estimates and follow a clear-cut project plan.

• Do not neglect unexpected costs due to changes in requirements.

• Carry out market research and opt for the best-fitting ERP software.

• Screen the vendors and prefer those who are willing to negotiate prices.

Pricing Plans

Finally, the best ERP software price in India comes with flexible plans. The vendors also ensure pricing flexibility to satisfy the customers. Some of the standard pricing policies are;

• Monthly subscriptions with upgrades and support services
  

• Unlimited user packages without any additional expenses

• Low-risk capital expenditures and post-deployment billing

• No upfront costs, and payment privileges after the second year

• Different payment gateways like credit cards, bank transfers, cash, cheque, etc

Conclusion

To sum up, the ERP software price in India depends on different factors. The cost varies for open-source, proprietary, on-premise, and cloud solutions. Understand the ERP’s value and implement an inexpensive system that befits your company. Perform a detailed cost-benefit analysis at the initial phase.

Since ERP solutions are diverse, there is no fixed or right price. For micro-companies, there are online services priced between 10k and 60k per annum. You can also opt for a top-rated, integrated software. The cost is between 5 to 6 lakh for SMEs, while a corporate shells out 25 lakh to 1 crore. 

Find the right balance between business-friendly features and pricing plans. Stick to a pre-defined strategy and avoid over-shooting the budget. Make sure the ERP service vendor also offers long term support. Be upfront about the prices and don’t engage vendors who charge additional, hidden costs.  

Sample Pricing Policy

1. Inventory Software – INR 600 per month per user (a minimum of two users)
2. Accounting Software – INR 850 per month per user (a minimum of two users)
3. Manufacturing Software – INR 1200 per month per user (a minimum of three users)
4. Cloud ERP Software – INR 1800 per month per user (a minimum of five users)