This blog discusses various aspects of ERP Software Licensing Options and Maintenance Costs to help you understand crucial points before purchasing ERP software.
Investing in ERP is a tedious task, and businesses need to understand the worth and effort of planning before landing up at any conclusion. Planning an ERP software may require businesses to brainstorm. Many factors might also include various aspects to decide on cost factors. Since there are multiple options available for businesses to look for. There are many efforts that need to be involved in the whole process. This blog discusses various aspects of licensing options and maintenance costs. This blog helps you come to the right conclusion to purchase ERP software perfect for your business needs.
Importance of ERP Software Licensing Options
The licensing usually define the “cost of ownership” for your ERP software. Investing in ERP is a long-term vision, and it binds organizations to invest in a solution that matches the organization’s needs and requirements well. Since pricing is a crucial factor, the businesses also need to decide which software and licensing model to choose. While various options are available depending upon varied factors, licensing usually might hugely influence software pricing due to technical implications and infrastructure required to run the application. The licensing decision is majorly based on software features, business expectations, number of users, tech infrastructure, etc.
Here are some crucial points to refer to before understanding different licensing options:
- Licensing Options might vary in terms of costs for different businesses.
- The Licensing Options might pose limitations in features as per the pricing model, so you need to choose an apt option that suits your business well and fits your budget seeking long-term return.
- Different Licensing Options might offer you various pricing models (One time/Yearly/Monthly).
ERP Software Licensing Options
There are multiple licensing options available in the software market to get the software that fits your needs well. Here are some of the options to help you decide which license to choose for your ERP Software.
1) Perpetual License
The Perpetual Licences are usually on-premise or on-site software that businesses purchase at a one-time fee. Businesses use to prefer these kinds of software due to negligible purchase costs and features it provides at that price, but since the introduction of cloud-based software and SaaS platforms, it is getting obsolete as technology is progressing. The organization with low and mid budgets can opt for such software, but it does offer a complication in future costs that may incur charges for business in the longer term. One of the significant constraints of this option is that the software needs to be hosted by the buyer that might add infrastructure costs for server or hosting services. In this case, the technical upgrades and maintenance lie in the hands of business organizations that may get pricy year by year.
The maintenance costs for perpetual licensed software is around 18-25% of the net software cost.
2) Subscription or Saas (Software As A Service) Platform
The Saas (Software As A Service) Platform is quite popular these days due to the extraordinary features and user-friendliness options it offers to businesses. These platforms provide set features to businesses and organizations as per their requirements and charge monthly or annually as a subscription fee. Infrastructure, maintenance, and IT are usually looked at by these service providers, which doesn’t bother the business organization to bear such risks and costs. One of the benefits of purchasing SaaS-based ERP software is the adaptability to change as per the market needs and technology trends.
Maintenance Cost: The subscription costs include maintenance costs combined into the pricing model.
3) Open Source
The Open-Source ERP Softwares are installed in a hosting that might incur enormous costs for businesses in maintenance and infrastructure. This software might also demand customizations to suit business-specific needs and add more development costs for the business to keep it up and running.
Maintenance Cost: The Open Source ERP software might be initially free to use but may incur costs for hosting and infrastructure. It may cost you an in-house development team.
ERP Software Licensing FAQs
What purpose an ERP Can solve in my business?
ERP helps in streamlining all your business processes and activities to make them more efficient and productive. It can replace your existing manual tasks with more reliable technology solutions and processes.
Why should I think about a long-term vision for ERP Software?
The investment in ERP does cost businesses a huge amount, and it may incur maintenance and support costs over a period of time. In order to save operational costs, the business should plan the features and specify business requirements well.
Can ERP software be customized as per my business domain and industry?
Yes, the ERP does work for a wide range of industries and may be customized as per your business requirements.
What Type of License should I consider for ERP?
The business should choose licensing option as per their needs, requirements, and team size. However, considering the ROI, the subscription model and Open-Source framework do offer great value to businesses of all sizes.
Can I update my ERP later on?
Yes, the ERP features can be updated at a later stage. This is quite flexible if you opt for open source or custom ERP development.
How to Choose ERP Vendor?
The ERP vendor should pose a good level of expertise in delivering you the right solution to yield desired results and outcomes for your business. It is always important to check products, portfolios, pricing, etc., before choosing a vendor.
Is it possible to get my employees trained on using ERP?
Yes, the developer can offer you training and support options to make your employees understand the software.
Do I have to pay for licensing, maintenance and support on a regular basis?
In the case of subscription-based software, the company has to incur licensing, maintenance on a yearly basis. It may vary from vendor to vendor.
Do I have to pay per user basis if I buy ERP for my organization?
The SaaS-based software does come in per-user-based pricing, but custom software can be developed at cumulative costs.
Are there any hidden costs included in ERP Licensing?
A business should get a clear view of costs before purchasing ERP software. It is quite important to justify all the costs with the vendor inclusive of maintenance, support costs.
Software licensing may vary differently for different business needs but seeing the trends in the software industry. The SaaS is becoming quite popular as compared to perpetual licensing due to its wide offering of affordable monthly/yearly equated costs covering all hassles that businesses need to take while purchasing ERP software.
The cloud-based ERP solution offers a competitive edge for businesses to focus on their operations without worrying much about enterprise resource planning. A small and mid-sized business can still find their approach right by buying perpetual licenses that might cost relatively less than other options in the market. The NOI technologies can help you with a cost-affordable solution for businesses of all kinds to solve crucial enterprise resource planning challenges.